WORLD TRADE  
ORGANIZATION   
WT/DS394/R/Add.1 
WT/DS395/R/Add.1 
WT/DS398/R/Add.1 
5 July 2011 
 (11-3154) 
 Original: English 
  
 
     
CHINA – MEASURES RELATE D TO THE EXPORTATION 
OF VARIOUS RAW MATERIALS 
 
 
Reports of the Panel  
 
 
Addendum 
  
 This addendum contains Annexes A to F to the Reports of the Panel to be found in documents 
WT/DS394/R, WT/DS395/R and WT/DS398/R.   
  
 
_______________ 
  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page i 
  
   
  
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 
 
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WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page ii 
  
  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/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page A-1 
  
   
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 opening oral  statement of the complainants at 
the first substantive meeting A-9 
A-3 Closing oral statement of the United St ates 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 or al statement of the United States at 
the second substantive meeting A-23 
A-6 Closing oral statement of the United States at the second substantive 
meeting A-27 
 
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Page A-2 
  
  ANNEX A-1 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
THE UNITED STATES 
  I. INTRODUCTION 
1. Despite China's commitments to limit or elim inate the use of export restraints during the 
course of its negotiations to accede to the WTO, Chin a's export restraints have proliferated in number 
and kind. China now subjects over 600 items to non- automatic licensing and over 350 items to export 
duties.  These export restraints have become incr easingly restrictive over time; export quota amounts 
have decreased while export duty rates have increased. 
2. The products subject to the export restraints at  issue in this dispute are various forms of 
bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, 
and zinc (together the "Raw Materials"). At issue in this dispute are four types of restraints that China 
imposes on the exportation of the Raw Materials: (1) export duties; (2) export quotas; (3) export 
licensing; and (4) minimum export price requirements. Each type of export restraint, including in 
some cases its administration, is inconsis tent with China's ob ligations under the General Agreement 
on Tariffs and Trade 1994 ("GATT 1994") and China's Protocol of Accession to the WTO 
("Accession Protocol"), which incorporates commitm ents made by China in the Report of the 
Working Party on China's Accession to th e WTO ("Working Party Report").   
II. FACTUAL BACKGROUND 
A. C
HINA 'S POLICIES FOR DEVELOPING AND PROMOTING ITS DOMESTIC INDUSTRY RELY ON 
RESTRAINING THE EXPORTATION OF RAW MATERIALS  
3. China's economic development is guided and directed by various plans and policies 
formulated and issued by the central government, including the Five Year Plans for National 
Economic and Social Development . Over the period of the tenth and eleventh Five-Year Plans, 
spanning the years 2001 to the present, China has achieved remarkable progress in its industrial 
growth and development. This growth, however, com es at the expense of the rest of the world.  
China's production of industrial raw materials an d processed goods has increased dramatically.  
China's exports of processed, value-added goods ha ve also increased. However, China's exports of 
industrial raw materials have decreased. 
4. These trends are the result of a deliberate strategy that China employs to optimize the 
conditions for realizing its econo mic and industrial ambitions. China's industrial strategy is to 
leverage and exploit the differences  in the international and domes tic markets for raw materials and 
downstream, processed products, using restraints on e xports as the linchpin. The export restraints that 
China imposes on the Raw Materials are part of th is industrial policy, which is predicated on 
advantaging China's domestic producers and indust ries, but distorts the international economic 
marketplace and is inconsistent with China's WTO obligations.  
B. THE RAW MATERIALS  
5. The nine industrial raw materials subject to the various export restraints imposed by China – 
bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, 
and zinc – are either naturally occurring minerals  or materials that have  undergone some initial  WT/DS394/R/Add.1 
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  processing. China is a leading global producer of all nine of these raw materials, which renders 
China's restraints on their exportation particular ly distortive for non-Chinese consumers of these raw 
materials and of the products manufactured from them. 
C. E
XPORT DUTIES  
6. China's obligations under paragraph 11.3 of Pa rt I of the Accession Protocol require that 
China not impose export duties on products that are not listed in Annex 6 of the Accession Protocol.  These obligations also require China to limit any export duties imposed on products that are listed in 
Annex 6 to the rates provided therein.   
7. However, China imposes export duties on va rious forms of bauxite, coke, fluorspar, 
magnesium, manganese, silicon metal, and zinc,
1 even though none of these materials is listed in 
Annex 6. In addition, China also imposes export duties on yellow phosphorus (which is listed in 
Annex 6) at a rate that exceeds the maximum rate provided in Annex 6. 
D. NON-AUTOMATIC EXPORT LICENSING FRAMEWORK  
8. China restricts the exportation of various fo rms of bauxite, coke, fluorspar, manganese, 
silicon carbide, and zinc by subjecting thei r exportation to non-automatic export licensing.2  
MOFCOM, together with Custom s, formulates, adjusts, and publishes a catalog listing all goods 
whose exportation is designated for restriction. Exportation of such goods requires approval by 
MOFCOM and is subject to export licensing that is, accordingly, not automatic.   
9. Non-automatic export licensing (all references to "export li censing" hereinafter mean non–
automatic export licensing) is th e framework through which China imposes and administers the export 
quotas for bauxite, coke, fluorspar, silicon carbide, and certain forms of zinc, as discussed below.  For 
these products, the non-automatic export licensing requirements function as a restriction on exportation additional to the restriction effected by  the export quotas. Manganese and certain forms of 
zinc are subject to non-automatic licensing, but not quotas.  
E. E
XPORT QUOTAS  
10. China restricts the exportation of various forms of bauxite, coke, fluorspar, silicon carbide, 
and zinc by subjecting the exportation of th ese materials to export quotas or prohibitions.3 China 
maintains two systems for allocating export quotas: direct allocation or a quota bidding system. The export quotas on coke and zinc are allocated "dir ectly". The export quotas on bauxite, fluorspar, and 
silicon carbide are allocated through a bidding system. 
11. MOFCOM is responsible for setting the total amount of export quotas of the following year 
no later than October 31 of each year, distributing export quotas, evaluating applications for export 
quotas, determining whether to grant quotas, and in collaboration with Customs, is responsible for 
                                                      
1 For purposes of the discussion of China's export duties, the terms "bauxite ", "coke", "fluorspar", 
"magnesium", "manganese", "silicon metal", "yellow phosp horus", and "zinc" cover the forms of each of these 
Raw Materials listed in Chart of Raw Materials Subject to Export Duties (Exhibit JE-5). 
2 For purposes of the discussion of China's non-automatic export licensing, the terms "bauxite", "coke", 
"fluorspar", "manganese", "silicon carbi de", and "zinc" cover the forms of each of these Raw Materials listed in 
Chart of Raw Materials Subject to Export  Licensing and Quotas (Exhibit JE-6). 
3 For purposes of the discussion of China's export quotas, the terms "bauxite ", "coke", "fluorspar", 
"silicon carbide," and "zinc" cover the forms of each of these Raw Materials listed in Chart of Raw Materials 
Subject to Export Licensing and Quotas (Exhibit JE-6). WT/DS394/R/Add.1 
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  formulating, adjusting, and publishing a catalog lis ting all goods subject to export quota.  MOFCOM 
must approve the exportation of the goods listed in the catalog as subject to quota before they can be 
exported.  Entities that are approved to export under the quotas are issued a certificate of quota.  Only 
after an exporter obtains a certificate of quota can that exporter export the relevant products.   
12. While China publishes the annual quota amounts for most products subject to quota, China 
did not publish the annual quota amount for coke. China instead publishes notices during the year 
announcing that MOFCOM is distribut ing the export quota on coke to specific enterprises.  China has 
not published any quota amount in relation to the export quota on zinc in 2009. 
13. Coke Export Quota Application Process. China requires enterprises to apply to receive an 
allocation of coke under the export quota for a given year  in October of the previous year.  As part of 
that application process, China requires enterprises to sa tisfy certain criteria in order to be eligible to 
receive an allocation under the quota. Those criteria include having exported a certain amount of coke 
in previous years, and in the case of certain ente rprises, having a certain minimum registered capital.  
Applicant enterprises who do not satisfy the requis ite criteria are not permitted to export coke under 
the quota.  China also requires enterprises applying  to export coke under the quota to submit a number 
of documents including prior export invoices.  
14. China empowers the CCCMC with responsibility for reviewing and evaluating the 
applications of enterprises seeking to export coke  under the quota. Ulti mately, MOFCOM publishes 
the list of all companies that satisfy the eligib ility criteria on the basis of the CCCMC's advice. 
15. In addition, MOFCOM administers different application processes for Chinese enterprises 
and foreign-invested enterprises. While the 200 9 application procedures for foreign-invested 
enterprises do not appear to be published, the measures allocating portions of the quotas to foreign-
invested enterprises in 2009 make clear that such  enterprises are subject to an application and 
approval process for the coke export quota.  
16. While China also imposes export quotas on zinc, China has not published any measures in 
2009 announcing the quantities of zinc that may be  exported under the quota or any measures setting 
forth application procedures for enterpri ses seeking to export under the quota.  
17. Export Quota Bidding. China allocates the export quotas on bauxite, fluorspar, and silicon 
carbide through a bidding process. Enterprises seeking to export the materials subject to the bidding 
procedure are required to satisfy certain eligibility criteria in order to participate in the bidding 
process including criteria relating to minimum regi stered capital and prior export experience. The 
enterprises that satisfy such criteria and participat e in the bidding process must submit a bid price and 
bid quantity for the material they are seeking to export. China then awards portions of the quota beginning with the bidding enterprise that submits  the highest bid price. The enterprises that are 
awarded a portion of the quota must pay a "total award price" ( i.e., the enterprise's bid price 
multiplied by its bid quantity) in order to export.  
18. MOFCOM has established Bidding Offices composed of inter alia representatives of the 
CCCMC to administer aspects of the bidding pr ocess. The Bidding Office's – and therefore the 
CCCMC's – responsibilities include reviewing the app lications of bidding enterprises to determine 
whether they satisfy the requisite eligibility criteria. Applicant ente rprises are also required to submit 
certain documents including a balance sheet and income statement, and information including 
registered capital, net profit, and prior export volumes and values.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
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  F. E
XPORT LICENSING ADMINISTRATION AND REQUIREMENTS  
19. China controls and restricts the exportation of  bauxite, coke, fluorspa r, manganese, silicon 
carbide, and zinc through an export licensing system  that conditions the issu ance of licenses and the 
usage of those licenses in various ways.4   
20. There are three types of export licenses, which determine where and how many times a 
particular license can be declared and used. Licenses must be obtained from particular license issuing 
entities depending on the product being e xported and/or the type of exporter applicant.  Export license 
issuing entities review applications based on a vari ety of factors and documents including documents 
of approval issued by MOFCOM in addition to  the export contracts, exporter management 
qualifications, and other materials to  be submitted, none of which are further identified or defined in 
the Export Licensing Rules  or related licensing measures. Export licensing entities and individual staff 
members of such entities are subject to sanctions for violating the rules and regulations applicable to 
export license issuance. 
G. MINIMUM EXPORT PRICE REQUIREMENT  
21. China restrains the exportation of bauxite, coke, fluorspar, magnesium, silicon carbide, 
yellow phosphorus, and zinc by imposing a mi nimum price requirement on their exportation.5  China 
implements this restraint throug h a non-transparent system. Based on statements made by China and 
documents submitted by Chinese exporters in US cour ts, it appears that export prices that are set by 
the CCCMC are observed by exporters through an o fficial "system of self-discipline" and further 
reinforced through the availability of penalties imposed by MOFCOM, and through China's licensing 
authorities and Customs. 
III. LEGAL DISCUSSION 
A. CHINA 'S EXPORT DUTIES ARE INCONSISTENT WITH CHINA 'S OBLIGATIONS UNDER PART I 
PARAGRAPH 11.3  OF THE ACCESSION PROTOCOL  
22. Paragraph 11.3 of the Accession Protocol contains a commitment by China to "eliminate all 
taxes and charges applied to exports" except in two specific situations: (1) where the taxes and 
charges are covered by Article VIII and applied cons istently with the requirements of Article VIII; 
and (2) where the taxes and charges are imposed on pr oducts listed in Annex 6 at  a rate less than or 
equal to the ad valorem  percentage specified for those products in Annex 6. 
23. China imposes "temporary" export duties at ad valorem rates ranging from 10 to 40 per cent  
on various forms of bauxite, coke, fluorspar, magn esium, manganese, silicon metal, and zinc. These 
duties are charges applied to exports that are term ed "export duties" in China's measures. The export 
duties resulting from the application of these duty rates are not applied "in conformity with the 
provisions of Article VIII of the GATT 1994" becau se export duties do not fall within the scope of 
that Article. Furthermore, none of the products on which these export duties are imposed is listed in 
Annex 6. Accordingly, China's maintenance of th ese temporary export duties is inconsistent with 
China's commitment under paragraph 11.3 of the Accession Protocol.  
                                                      
4 As set forth above, for purposes of the discussion of China's non-automatic export licensing, the terms 
"bauxite", "coke", "fluorspar", "manganese", "silicon carb ide", and "zinc" cover the forms of each of these Raw 
Materials listed in Chart of Raw Materials Subject to Export Licensing and Quotas (Exhibit JE-6). 
5 See Chart of Raw Materials Subject to Minimum Export Prices  (Exhibit JE-7) for products subject to 
minimum export price requirements. WT/DS394/R/Add.1 
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  24. China also imposes a "regular" ad valorem export duty at a rate of 20 per cent on yellow 
phosphorus. In addition to this re gular export duty, China imposes a "special" export duty rate for 
yellow phosphorus to 50 per cent, resulting in a to tal export duty rate of 70 per cent effective 1 
January 2009. The export duty resulting from the appli cation of these duty rates to exports of yellow 
phosphorus is explicitly exclude d from the coverage of Article VIII of the GATT 1994. The 
maximum ad valorem  export duty rate permitted to be applie d to yellow phosphorus under Annex 6 is 
20 per cent. Accordingly, the export duty rate of 70%  applied to the exportati on of yellow phosphorus 
is inconsistent with China's commitment unde r paragraph 11.3 of the Accession Protocol. 
B. C
HINA 'S EXPORT QUOTAS ARE INCONSISTENT WITH CHINA 'S OBLIGATIONS UNDER 
ARTICLE  XI:1  OF THE GATT 1994 
25. Article XI:1 of the GATT 1994 explicitly prohib its Members from instituting or maintaining a 
restriction or prohibition made effective through a quota on the exportation of any product. However, 
China subjects the exportation of various forms of ba uxite, coke, fluorspar, s ilicon carbide, and zinc to 
quotas. These export quotas are therefore in breach of China's obligations under Article XI:1 of the 
GATT 1994. As China subjects the exportation of zi nc to a quota, but does not publish any export 
quota for zinc, China effectively sets the export quota fo r zinc at zero. As a result, China prohibits the 
exportation of zinc, in contraventi on of Article XI:1 of the GATT 1994. 
26. China's export quotas on bauxite, coke, fluorsp ar, silicon carbide, and zinc are also 
inconsistent with paragraphs 162 and 165 of the Working Party Re port, which contain enforceable 
commitments with respect to the elimination of export restrictions.   
C. CHINA 'S ADMINISTRATION AND ALLOCATION OF ITS EXPORT QUOTAS IS INCONSISTENT WITH 
CHINA 'S OBLIGATIONS UNDER THE ACCESSION PROTOCOL , THE WORKING PARTY REPORT , 
AND THE GATT 1994 
27. Trading Rights . China's commitments under paragraph 5.1 of Part I of the Accession 
Protocol and paragraphs  83 and 84 of the Working Party Repor t (commonly referred to as China's 
"trading rights" commitments), require China to give  all foreign enterprises and individuals, as well as 
all enterprises in China, the right  to export most products. Furthermore, China explicitly committed to 
eliminate its examination and approval system and to  eliminate certain eligibility criteria for obtaining 
or maintaining the right to export including criteria relating to prior export experience and minimum registered capital. However, in its administration of the quotas for coke, which is directly allocated, 
and the quotas for bauxite, fluorspar, and silicon car bide, which are allocated through a bidding 
process, China breaches these commitments by impermi ssibly requiring exporters to satisfy certain 
criteria in order to be eligible to receive an a llocation of the coke quota or participate in the quota 
bidding process.  
28. Partial and Unreasonable Administration .  China's administration of its export quotas is also 
inconsistent with Article X:3(a) of the GATT 1994,  which requires Members to administer certain 
measures described in Article X:1 in a "uni form, impartial and reasonable manner."   
29. China empowers a private party – the CCCMC – to have direct involvement in the 
administration of the export quota on coke, which is allocated directly, an d the export quotas on 
bauxite, fluorspar, and silicon carbide, which are allocated through the bidding system. The CCCMC 
evaluates enterprises' applications to export unde r the quota and determines whether they satisfy the 
relevant eligibility criteria. In that role, the CCCM C also obtains access to sensitive and confidential 
information, including past export invoices in th e case of the coke quota, and balance sheets and 
income statements in the case of the export quotas allocated through bidding. The involvement of the  WT/DS394/R/Add.1 
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  CCCMC – an association of private commercial partic ipants in a common industry –  renders China's 
administration of these export quotas partial and unreas onable in contravention with Article X:3(a) of 
the GATT 1994. 
30. Total Award Price . Article VIII:1(a) of the GATT 199 4 prohibits "fees and charges of 
whatever character . . . imposed . . . on or in co nnection with exportation" where such fees are not 
"limited in amount to the approximate cost of services rendered..." Enterprises that are awarded a 
portion of the export quota for materials subject to  quota bidding are required to pay a total award 
price in order to export the materials. The total aw ard price therefore constitutes a "fee or charge of 
whatever character . . . imposed . . . in connectio n with . . . exportation" within the meaning of 
Article VIII:1(a). The total award price is also not  limited to the approximate cost of services 
rendered. Thus, the total award pri ce is inconsistent with China's ob ligations under Article VIII:1(a) 
of the GATT 1994. The total award price is also in consistent with paragraph 11.3 of the Accession 
Protocol as a "tax or charge" imposed on the exporta tion of products that are not listed in Annex 6. 
D. C
HINA 'S EXPORT LICENSING FOR PRODUCTS SUBJECT TO RESTRICTED EXPORTATION IS 
INCONSISTENT WITH CHINA 'S OBLIGATIONS UNDER ARTICLE XI:1  OF THE GATT 1994  AND 
PARAGRAPHS 162 AND 165 OF THE WORKING PARTY REPORT  
31. China uses licensing to subject the exportation of  designated products to restriction. China 
identifies such goods on a positive list of products  subject to export licensing published annually. The 
list that China published for 2009 includes various  forms of bauxite, coke, fluorspar, manganese, 
silicon carbide, and zinc, indicating that the exportati on of these products is designated by the state as 
restricted. Furthermore, the export licensing required to export the these restricted products is not automatic. In contrast, China also maintains an au tomatic export licensing system. Article 15 of the 
Foreign Trade Law  instructs MOFCOM and its partner in stitutions to grant approval whenever 
exporters seeking to export the unrestricted goods subject to automatic licensing apply for the 
automatic licenses. However, for goods whose exporta tion is designated for restriction, MOFCOM is 
not required to grant its approval to  applicant exporters and is author ized to impose various conditions 
on their exportation. 
32. Export licensing is thus a measure that restricts the exportation of these products in breach of 
China's obligations under Article XI:1 of the GATT 1994. Paragraphs 162 and 165 of the Working 
Party Report contain enforceable commitments with  respect to the elimination of non-automatic 
export licensing. China's export licensing is also in consistent with paragra phs 162 and 165 of the 
Working Party Report and paragraph 1. 2 of China's Accession Protocol.   
E. C
HINA 'S MINIMUM EXPORT PRICE REQUIREMENT IS INCONSISTENT WITH CHINA 'S 
OBLIGATIONS UNDER THE GATT 1994 
33. China's minimum export price requirement for bauxite, coke, fluorspar, magnesium, silicon 
carbide, yellow phosphorus, and zinc, as described above, prohibits the exportation of these products 
if the export price does not meet a designated minimum. This constitutes a restriction on the 
exportation of these materials in contravention of  China's obligations under Article XI:1 of the 
GATT 1994.   
34. Furthermore, China administers the minimum export price requirement for yellow phosphorus 
through an enhanced enforcement mechanism know n as the Price Verification and Chop ("PVC") 
procedure.  The PVC procedure involves the participation of the CCCMC in the customs clearance 
process for yellow phosphorus. The CCCMC's participa tion permits the flow of exporters' sensitive 
commercial information to representatives of parti es with interests that are in conflict with the WT/DS394/R/Add.1 
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Page A-8 
  
  exporters.  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.   
35. Finally, China's failure to publish its laws, regul ations, decisions, and rulings pertaining to the 
minimum export price requirement for these Raw Materi als, is inconsistent with China's obligations 
under Article X:1 of the GATT 1994. 
IV. CONCLUSION 
36. For the reasons set forth in this submission, the United States respect fully requests the Panel 
to find that China's measures, as set out above, ar e inconsistent with China's obligations under the 
GATT 1994 and the Accession Protocol. The United Stat es further requests, pursuant to Article 19.1 
of the DSU, that the Panel recommend that Chin a bring its measures into conformity with the 
GATT 1994 and the Accession Protocol. 
 
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 Page A-9 
  
  ANNEX A-2 
  
EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT  
OF THE COMPLAINANTS AT TH E FIRST SUBSTANTIVE MEETING 
  
I. INTRODUCTION 
1. On behalf of the complainants, we would like to begin by thanking the Panel and the 
Secretariat staff for taking on this task.  Our dele gations look forward to working with you, and with 
the delegation of China, as you carry out your work.  The complainants have attempted to consolidate 
their views in a joint statement, to be read by th e three complaining parties.  This statement will be 
supplemented by statements by individual complaining parties. 
2. The measures at issue in this di spute restrain the exportation of nine types of industrial raw 
materials from China.  These raw materials are important inputs for the manufacture of steel, aluminum, and chemicals – and their downstream pr oducts. China's export restraints are barriers to 
trade that severely distort the conditions of competition in the global marketplace.   
II. CHINA'S EXPORT RESTRAINTS 
3. Export Duties. In contravention of its obligations in paragraph 11.3 of its Accession Protocol, 
China imposes export duties on the exportation of various forms of bauxite, coke, fluorspar, 
magnesium, manganese, silicon metal, and zinc, ev en though China did not reserve the right to 
impose export duties on any of these products.  For yellow phosphorus, China did reserve the right to 
impose export duties up to 20%. However, as of the date  of filing of the consultations request in this 
dispute, China's frequently changing export duties on yellow phosphorus stood at 70%.  
4. Export Quotas. The second form of export restraint we have asked you to examine is an 
export quota. Article XI:1 of the GATT 1994 prohibits such export quotas. Yet China subjects the exportation of bauxite, coke, fluor spar, silicon carbide, and zinc to quotas. China has made these 
quotas more and more restrictive over time.   
5. Non-Automatic Export Licensing . Contrary to Article XI:1 of the GATT 1994, China 
subjects the exportation of bauxite, coke, fluorspar , manganese, silicon carbide, and zinc – to export 
licensing that is not automatic.  
6. Minimum Export Prices.  China subjects the exportation of bauxite, coke, fluorspar, 
manganese, magnesium, silicon carbide, yellow phos phorus, and zinc to a minimum export pricing 
system that constitutes an impermissible expor t restriction under Article XI:1. Specifically, 
exportation of these raw materials is subject to a system that prevents exportation unless the seller 
meets or exceeds the minimum export price.  
7. Administration of the Export Restraints . The complainants have also asked the Panel to 
examine a number of requirements China imposes in th e administration of its export restraints in light 
of China's obligations under th e trading rights commitments in  China's Accession Protocol and 
Working Party Report, and with China's oblig ations under Article X of the GATT 1994. These 
administration-related claims address China's impos ition of eligibility criteria on enterprises seeking 
to export products subject to e xport quota, impartial or unreasonable administration of the minimum WT/DS394/R/Add.1 
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  export pricing and of the application process for products subject to export quota, and failure to 
publish measures related to minimum export pricing. 
III. THE MEASURES WITHIN THE PANEL'S TERMS OF REFERENCE ARE THOSE 
SET OUT IN THE PANEL REQUESTS, WHICH FRAME THE "MATTER" 
REFERRED TO THE PANEL BY THE DSB  
8. Next, we would like to address the issue of the "identity of the measur es at issue" in this 
dispute.  Contrary to China's arguments, all of the 2009 measures were very much at issue when consultations were requested and when the Panel was established, on 21 December 2009.  The matter 
that the DSB referred to the Panel, and thus the Pane l's terms of reference, is  the consistency of those 
2009 export restraint measures with China's WTO ob ligations. The complainants are therefore entitled 
to findings and recommendations on these measures.  In addition, failure to examine and make 
findings regarding the 2009 measures would effectively create a "moving target" for both the complainants and the Panel in this dispute.   
IV. CHINA'S PROFFERED JUSTIFICATIONS FOR ITS IMPOSITION OF EXPORT 
DUTIES AND EXPORT QUOTAS ON THE RAW MATERIALS 
9. Export Duties. China does not contest that the export duties being challenged are imposed 
inconsistently with its obligati ons in paragraph 11.3 of the Accession Protocol, or that these export 
duties fall outside of the exceptions explicitly provide d in paragraph 11.3. Instead, China invokes the 
exceptions in Article XX of the GATT 1994 as justifica tions.  However, Article XX is not available as 
a justification for a breach of China's obligations  in paragraph 11.3 of th e Accession Protocol.   
10. By its terms, Article XX applies strictly to the GATT 1994.  The referenced "Agreement" in 
the chapeau of Article XX is the GATT 1994. In China – Publications and Audiovisual Products , the 
issue was whether the Article XX exceptions app lied to China's trading rights commitment in 
paragraph 5.1 of the Accession Protocol. The Appella te Body's finding that Members agreed to apply 
the Article XX exceptions to paragraph 5.1 was base d on the specific language of paragraph 5.1. This 
language is not found in and is in sharp contrast to paragraph 11.3.Additiona l relevant context also 
supports the conclusion that Article XX is not avai lable as a defense for a breach of the export duty 
commitment. 
11. Export Quotas .  China does not deny that the export quotas being challenge d contravene the 
obligation in Article XI:1 of the GATT 1994. Instead , China claims that the export quotas on coke and 
silicon carbide are justified under Article XX(b) of the GATT 1994 and that the export quota on 
refractory grade bauxite is justified pursuant to Ar ticle XI:2(a) or, failing that, Article XX(g) of the 
GATT 1994.  
V. CHINA HAS FAILED TO ESTABLISH THAT ITS MEASURES FULFILL THE 
CRITERIA SET OUT IN ARTICLE XX OF THE GATT 1994 
12. China's Export Quota on Fluorspar and Re fractory-Grade Bauxite Is Not Justified by 
Article XX(g) of the GATT 1994 .  China's duties on fluorspar exports and China's quota on refractory 
grade bauxite exports fail to satisfy the require ments of Article XX(g). First, China provides no 
argument or support for the assertion that these export restraints "relate to" the conservation of these 
raw materials, which has been interpreted as mean ing "primarily aimed at" the conservation of a 
natural resource and having a "clo se and substantial relationship of  means and ends" between the 
means presented by the measure at issue and the ends of conservation.    WT/DS394/R/Add.1 
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  13. Rather than directly address the question of wh ether the measures at issue are made effective 
in conjunction with restrictions on domestic produc tion or consumption of fluorspar and refractory 
grade bauxite, China merely asserts that it has "adopt ed a comprehensive set of measures relating to 
the conservation" of fluorspar and refractory grade bauxite. Many of these measures came into effect 
in 2010. Of the remaining measures, China fails to address how these measures constitute 
"restrictions" on domestic production or consumption of fluorspar or refractory grade bauxite.  China 
also characterizes its purported right to adopt these export restraints as an issue of "sovereignty" over its natural resources, and also purports to find support in the principles of "conservation" and 
"sustainable development".  The sovereignty of a WTO Member over its natural resources is not at 
issue under Article XX(g). Regarding the requirements of the chapeau  of Article XX, China has made 
no serious attempt in its first submission to satisfy its burden.  Accordingly, China has failed to meet 
its burden under the chapeau . 
14. China's Export Duties on Magnesium, Manganese, and Zinc, and Export Quotas on 
Bauxite and Silicon Carbide Are Not Justified by Article XX(b) . China contends that certain of its 
export duties and export quotas are justified pursuant to Article XX(b), because the export restraints 
result in less production of the products, and ther efore, less environmental pollution. However, the 
measures do not satisfy the elements of Article XX(b). As the Appellate Body has stated, "a 'necessary measure is...located signi ficantly closer to the pole of 'indispensable' than to the opposite 
pole of simply 'making a contribution to' ". The exportation of the products at issue is entirely 
unrelated to environmental pollution. As China itsel f argues, it is the production of these products, not 
their export, that causes pollution. Thus, restraints on the export of the products at issue bear no direct 
relationship to China's environmental goals. The rest raints, however, do have a direct economic effect 
in terms of providing a competitive advantage to Ch ina's industrial users of raw materials. China's 
arguments under Article XX(b) also raise serious systemic concerns, because under China's approach, 
Article XX(b) would justify a WTO-inconsistent export restriction on any product whose production 
causes pollution, or on any economically advantageous or energy efficient product.   
15. With respect to scrap, China h as failed to establish that the ex port duties are contributing to, 
let alone necessary to, accomplishing increased secondar y production.  China's model is instead based 
on unsubstantiated assumptions rega rding supposed increases in seconda ry production.  In addition, 
China's estimates of increased secondary productio n that supposedly could result from the export 
duties is decidedly modest.  Much of the production and trade data presented by China's own 
economist also contradicts China's reasoning. Finall y, there are a number of reasonably available, 
WTO-consistent measures that China could take to mo re directly address its stated health objectives.  
China also fails to satisfy its burden to demonstr ate that these measures satisfy the elements of the 
chapeau of Article XX. 
16.   With respect to the metals, coke, and silic on carbide, China also significantly downplays the 
effects of China's policies downstream and the e nvironmental damage that results from increased 
downstream production using the raw materials as inputs. In addition, primary production of the 
metals at issue has increased in recent years. Fi nally, there are a number of reasonably-available, 
WTO-consistent measures that China could take to more directly address its health objectives.  China 
also fails to satisfy its burden to demonstrate that these measures satisfy the elements of the chapeau 
of Article XX. 
VI. CHINA'S EXPORT QUOTA ON BAUXITE IS NOT JUSTIFIED UNDER 
ARTICLE XI:2(A) OF THE GATT 1994 
17. As a threshold matter, as the party invoking th e defense under Article XI:2(a), China bears the 
burden of establishing that its export quota on refractor y-grade bauxite satisfies all of the elements of WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page A-12 
  
  the exception.  China has failed to do  so.  China's interpretation of the terms in Article XI:2(a) is also 
flawed, and relies heavily on the measures of other Members, which are not in the Panel's terms of reference and are irrelevant to this dispute.   
18. China's arguments also depend heavily on the supposed methodology employed by 
"criticality" assessments developed by the United States and the European Union. These studies do 
not purport to address the requirements of Article  XI:2(a) of the GATT 1994 and in fact are not 
relevant – let alone authoritative – as to the question of whether China's measures satisfy the 
requirements of Article XI:2(a).  This fact renders much of China's discussion of the export quota on 
refractory-grade bauxite beside the point as it relates to Article XI:2(a).   
19. China's assertion that refractory-grade bauxite is  essential to China appears to be based in 
large part on the assertion that refractory-grade baux ite is indispensable for the production of iron and 
steel, as well as other products such as glass, ceramics, and cement. This line of reasoning is untenable as it would suggest that any input into large-scale industrial operations would qualify as an 
essential product under Article XI:2(a). With respect  to "critical shortage," China neglects to 
meaningfully analyze that term, and instead me rely collapses the "essential products" and "critical 
shortage" inquiries in Article XI:2(a). China also  relies heavily on assertions that refractory-grade 
bauxite is "finite" or "limited" in its availability. This  is not sufficient to establish a "critical shortage."  
Finally, China's export quota is not "temporarily applied." 
VII. CONCLUSION 
20. Having taken on obligations as pa rt of its negotiated accession to the WTO, China now, for 
reasons that do not appear to be anything other than  industrial policy, appears to want to forego those 
obligations.  We ask the Panel to help ensu re that China abides by its commitments.  
  WT/DS394/R/Add.1 
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 Page A-13 
  
  ANNEX A-3 
 
CLOSING ORAL STATEMENT OF THE UNITED STATES  
AT THE FIRST SUBSTANTIVE MEETING 
  
1. Mr. Chairman and members of the Panel, on behalf of the United States, we would like to 
comment on a few matters in our closing statement.  
2. We would like to take this opportunity to reiterate  that there are two different sets of terms of 
reference issues raised by China.  The first set re lates to China's preliminary ruling request submitted 
on March 30, 2010, and on which the complainants a nd China have provided submissions to the Panel 
and participated in an oral hearing.  We understa nd the Panel reserved its decision with respect to two 
matters raised by that preliminary ruling request and that the Panel seeks to resolve those two issues 
promptly.   
3. With respect to the issues rai sed in the preliminary ruling request, China's only remaining 
argument from that request in its first written submissi on is in Section II.B of China's submission.  In 
that section, and throughout the panel meeting, China simply reasserted its arguments from the 
preliminary ruling process as it relates to Section III of the complainants' Panel requests.  However, 
those arguments are without merit for the reasons di scussed in our submissions to the Panel during the 
preliminary ruling process.  We recall that the Pane l stated in its preliminary ruling that the Panel 
would wait to make its final ruling on certain matters  after having a chance to review the parties' first 
written submissions. This is consistent with the re asoning that under Article 6.2, a responding party's 
argument that there is an alleged defect in the pane l request may be examined in light of the claims 
advanced in the first submission.  China has failed to and indeed cannot show any defect. 
4. In this regard, in an attempt to keep its Artic le 6.2 claims from the preliminary ruling process 
alive, China continues to argue that  the Panel requests at issue fail to satisfy the requirement in Article 
6.2 that in stating a claim, a panel request must set forth a plain connection between the measures at 
issue and the legal obligations that they breach.  Ho wever, China misstates the standard as articulated 
in past disputes.  The panel requests satisfy  the requisite standards of Article 6.2. 
5. The second set relates to China's terms of re ference objections under Article 6.2 of the 
Understanding on the Rules and Procedures Governing the Settlement of Disputes ("DSU") raised in 
China's first written submission, and for which China did not request a preliminary ruling. With 
respect to this set of issues, we  note that China attempted during the panel meeting to blur the lines 
between the preliminary ruling issues and the new te rms of reference issues in China's first written 
submission.  Those terms of reference issues raised  in China's first written submission are not within 
the scope of the preliminary ruling request.  While the complainants have coordinated to prepare an 
oral statement responding to a number of China's ar guments in its first written submission, we will 
respond to China's remaining arguments including tho se relating to terms of reference in our rebuttal 
submission and in responding to the Panel's questions.  
6. We would also like to respond to a few more points raised by China. We have heard a lot 
from China about its sovereignty over natural res ources and its economic policies. These statements 
merely confirm that the export restraints at issue are designed to serve China's economic goals and are 
not related to protection of the envi ronment or conservation.  Furtherm ore, the sovereignty of China is 
not at issue in this dispute.   WT/DS394/R/Add.1 
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Page A-14 
  
  7. China repeatedly invokes its supposed status as a developing country. This is an issue that 
was discussed at the time of China's accession to th e WTO as reflected at paragraphs 8 and 9 of the 
Working Party Report. Members of the Working Part y did not agree to give China the benefit of 
special provisions as a developing country Member in the context of China's export restraint 
commitments. Nor are there special provisions for China in relation to Articles XI or XX of the 
GATT 1994. Indeed, we find China's argument particularly  striking in this context, where it is seeking 
an exemption from its obligations on the basis of its  supposed developing country status in relation to 
raw material inputs, even in spite of the fact th at China is now the world's largest steel producer. 
8. In a similar vein, China also repeatedly in vokes Article XXXVI in yet another attempt to 
evade its obligations. In addition to the fact that Article XXXVI contains no commitments or 
obligations, there is no basis to support the notio n that this provision weak ens China's obligations 
under Article XI of GATT 1994 or paragraph 11.3 of  China's Accession Protocol or, in any way, 
affects the standard under GATT 1994 Article XX or Article XI:2(a). 
9. The "update" that China provided in its openi ng statement regarding an 16 August 2010, 
measure repealing three 1997 measures, brings us back  to our point on the Panel's terms of reference.  
China has demonstrated that its measures can appear  and disappear with ease. The measures that the 
complainants challenged in our panel requests are th ose export restraints in effect in 2009. The Panel 
should make findings and recommendations on the 2009 export restraints to prevent China from continually moving the target and shielding its measures from review. 
10. With respect to China's "right to regulate" ar guments, an overarching problem emerges. China 
is seeking exemptions from obligations without any b asis in the text of the WTO Agreement.  Just as 
other WTO Members are not permitted to breach th eir obligations unless an exception is explicitly 
provided for in the WTO Agreement and unless the conditions for that exception are met, so too 
China, as another Member of the WTO, has taken co mmitments to which it must adhere.  Otherwise, 
the rules-based trading system would cease to exist. 
11. With respect to China's proffered defenses, we offer the following comments. On China's 
defense under Article XX(g) of the GATT 1994, we not e that Article XX(g) requires that a measure 
must be "related to conservation," and Article XX( g) contains an "even-handedness" requirement.  
China has not come close to meeting these requirements. 
12. With respect to China's defense under Article  XX(b) of the GATT 1994, we note that in 
China's discussion of Article XX(b) in its oral st atement, China suggests that a measure may be 
justified under Article XX(b) if the measure contributes to sustainable development.  This assertion is 
without merit. 
13. Finally, regarding China's defense under Article  XI:2(a) of the GATT 1994, we observe that 
China's interpretation of Article XI:2(a) would bri ng every production input within the coverage of 
Article XI:2(a). This is inconsiste nt with the text and purpose of Article XI:2(a). Additionally, China's 
arguments regarding the requirement of a "critical shortage" in Article XI:2 (a) boil down to reading 
out from that provision the word "critical". 
14. These are the issues we addressed in our oral statem ent and at this first substantive meeting of 
the Panel with the parties. As we look ahead, we will  be addressing all of these issues in greater detail. 
In particular, we will be responding to China' s factual assertions, legal arguments, and economic 
theories advanced in support of its justifications for imposing its export duties and export quotas.  We 
will also be addressing issues that we did not have  the opportunity to touch on at this meeting, 
including China's arguments regarding the cons istency of its non-automatic export licensing,  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page A-15 
  
  minimum export price regime, quota administration, as well as China's responses to our trading rights 
and transparency claims under the GATT 1994, China's Accession Protocol, and Working Party 
Report. 
15. We look forward to re-convening with the Pa nel and the other parties at the second 
substantive meeting.  Thank you. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page A-16 
  
  ANNEX A-4 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF  
THE UNITED STATES 
 
I. INTRODUCTION 
1. At the heart of the dispute are the export du ties and export quotas that China maintains on 
these products. China fails to rebut th e complainants' claims that the e xport restraints are inconsistent 
with China's commitments in its Protocol of Ac cession to the WTO, which incorporates commitments 
made by China in the Report of the Working Pa rty on China's Accession to the WTO, and  its 
obligations under the GATT 1994. In fact, China largely concedes the inconsistency of the export 
restraints with the relevant obligations.   
2. China invokes Article XX(b) in an attempt to portray certain of the discriminatory export 
restraints as necessary for protection of health. But, a review of the facts confirms that China's defense 
does not withstand scrutiny.  Similarly, China's i nvocation of the exception related to conservation in 
Article XX(g) to justify certain of the export restra ints also fails. Finally, China has also failed to 
demonstrate that one of its export quotas for which it invokes Article XI:2(a) is justified pursuant to 
that provision.  China's statements in the course of this dispute have confirmed that the export 
restraints have the objective of ensuring China's continued economic growth.  As China states: "The 
imposition of export restrictions will allow China to de velop its economy in the future . . ."  This, and 
other statements that we will discuss, belie Ch ina's arguments in support of its defenses. 
3. Finally, China administers its export restraints  in a WTO-inconsistent manner through the use 
of export licensing, restrictions on the right to e xport, and minimum export pricing.  China has also 
failed to rebut these claims. 
II. CHINA'S EXPORT DUTIES ARE INCONSISTENT WITH CHINA'S OBLIGATIONS 
UNDER PARAGRAPH 11.3 OF THE ACCESSION PROTOCOL 
4. The export duties China imposes on bauxite, c oke, fluorspar, magnesium, manganese, silicon 
metal, yellow phosphorus and zinc ar e inconsistent with China's oblig ations under paragraph 11.3 of 
the Accession Protocol.  China does not attempt to defend the duties that it imposes on bauxite, silicon 
metal, and one form of manganese (ores and concen trates) or the special export duties it imposes on 
yellow phosphorus.  Instead, China attempts only to justify  the export duties it imposes on coke and 
fluorspar (which it imposes in combination with export quotas), magnesium scrap, manganese scrap, 
and zinc scrap, and magnesium metal, and mangane se metal, under exceptions  provided in Article XX 
of the GATT 1994. 
5. For the reasons set forth in the complainants' fi rst oral statement, the exceptions in Article XX 
are not available as a defense to a breach of th e export duty commitments in  paragraph 11.3 of the 
Accession Protocol.  Therefore, China's reliance on the exceptions contained in Article XX of the 
GATT 1994 to justify its export duties on coke, fl uorspar, magnesium and manganese metal, and 
magnesium, manganese, and zinc scrap is unavailing.  An analysis of the text of paragraph 11.3, the 
Appellate Body's reasoning in China – Audiovisual Products , and the relevant context of China's 
export duty commitment all support the conclusion that Article XX is not appli cable to paragraph 11.3 
of the Accession Protocol.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 Page A-17 
  
  6. Even aside from the fact that Article XX of the GATT 1994 is not  available as a justification 
for breaches of the commitment in paragraph 11.3 of the Accession Protocol, China would not meet 
the conditions required by Article XX(g) and Article XX(b). 
7. In order to justify these inconsistent export rest raints, it is China's burden to demonstrate that 
each measure at issue satisfies the specific conditions set out in sub-paragraph (g) or sub-
paragraph (b) of Article XX, and that each measure also satisfies the requirements of Article XX's chapeau.  
8. China's export duties on scrap products are not justified under Article XX(b) of the 
GATT 1994. First, China has presented no evidence th at the export duties on scrap products have 
made any contribution, let alone a material contribut ion, to increased levels of secondary production. 
China relies instead on projections of supposed in creases in secondary production in the future. 
Second, Dr. Olarreaga's economic analysis setting fort h such projections is fundamentally flawed and 
therefore unreliable.  Third, even if Dr. Olarreaga' s analysis were taken on its own terms, the increases 
in secondary production that would supposedly r esult from the export duties are modest and belie 
China's contention that the measures can make a "mat erial contribution" to the stated environmental 
objective.  Fourth, many of China's arguments are premised on factual inaccuracies regarding the products themselves.  Fifth, China's assertion of su pposed supply constraints – to the extent they are 
relevant to an analysis under Article XX(b) – fail to support China's defense. Sixth, primary 
production of magnesium metal, manganese metal, a nd zinc continue to expand in China further 
undercutting China's assertion that it  seeks to shift to increased secondary production. Seventh, there 
are a number of WTO-consistent reasonably available alternatives that China could employ to more 
directly address China's stated environmental objectives.  
9. China's export duties on magnesium metal, mangane se metal, and coke are also not justified 
under Article XX(b).  First, China has presented no evidence that the export duties on magnesium 
metal, manganese metal, or coke have made any co ntribution, let alone a material contribution, to 
decreased levels of production of those products.  China relies instead on projections of supposed 
increases in secondary production in the future.  Sec ond, primary production of the metals has in fact 
increased, and these products continue to be exported at  significant levels in the form of downstream, 
higher-value added products.  Third, Dr. Olarreaga' s economic analysis setting forth such projections 
is fundamentally flawed and therefore unreliable.  Fourth, there are a number of WTO-consistent 
reasonably available alternatives that China could employ to more directly address China's stated 
environmental objectives.  Thus, China's defense under Article XX(b) relating to magnesium metal, 
manganese metal, and coke should not be sustained.  
10. In examining whether China's export duty on fluor spar relates to conservation of fluorspar, 
the operative question is whether there is a close a nd genuine relationship of ends and means between 
the goal of fluorspar conservation and the means presented by the export duty. The answer to this 
question is no. 
11. China also fails to demonstrate that its e xport duty on fluorspar is "made effective in 
conjunction with restrictions on domestic production or consumption."  China asserts that it has a 
"conservation policy" consisting of a number of m easures "to manage the supply, production, and use 
of fluorspar."  As discussed below, these measures do not constitute "restrictions on domestic 
production or consumption."  The export duty on fl uorspar therefore is not "made effective in 
conjunction with" such restrictions.  Even if China had demonstrated the existence of restrictions on 
domestic production or consumpti on, China would still not have demonstrated the requisite even-
handedness to justify its export duty on  fluorspar under Article XX(g). WT/DS394/R/Add.1 
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Page A-18 
  
  12. The United States sets forth its arguments regard ing the measures within the Panel's terms of 
reference and the appropriate measures on which th e Panel's findings and recommendations should be 
made below.  Should the Panel, arguendo , review the export restraints as applied by China in 2010, 
and should the Panel consider the measures China implemented over the course of this proceeding's 
pendency through the summer of 2010 relevant to that review arguendo , the United States addresses 
the export duty on fluorspar applied in 2010 in light  of those measures below.  As the United States 
demonstrates, the measures China has introduced ove r the course of 2010 do not alter the fact that 
China's export duty on fluorspar is not jus tified under Article XX(g) of the GATT 1994. 
13. The burden of establishing conformity with th e relevant subparagraph and the chapeau lie 
with the party invoking the defense. Even if th e export duties at issue were consistent with the 
particular paragraph of Article XX that China in vokes, the export duties also fail to satisfy the 
chapeau  of Article XX. 
14. In China's first written submission and its oral statement to the Panel at the first meeting, 
China made no serious attempt to satisfy its burden  of establishing that the export duties satisfy the 
chapeau .  China has articulated the incorrect lega l standard for "arbit rary or unjustifiable 
discrimination" under the chapeau .  This renders China's statement that the export duties at issue do 
not discriminate between export destinations insufficien t to satisfy its burden.  China also asserts that 
the export duties do not constitute a disguised restric tion on international trade because they are "not 
applied in a manner that constitutes a concealed or unannounced restriction or discrimination in 
international trade."  China fails to present any evidence or argumentation to substantiate this 
assertion.  This is insufficient to satisfy China's bur den of demonstrating that its measures satisfy the 
requirements of the chapeau .  
III. CHINA'S EXPORT QUOTAS ARE INCONSISTENT WITH CHINA'S 
OBLIGATIONS UNDE R ARTICLE XI:1 OF THE GATT 1994 AND PARAGRAPHS 
162 AND 165 OF THE WORKING PARTY REPORT 
15. As the United States set forth in its first written submission, China subjects the exportation of 
various forms of bauxite, coke, fluorspar, silicon car bide, and zinc to quotas.  China has confirmed 
that it maintains a prohibition on the exportati on of zinc.  These export quotas and the export 
prohibition on zinc are inconsistent with Article  XI:1 of the GATT 1994 and paragraphs 162 and 165 
of the Working Party Report and paragraph 1.2 of China's Accession Protocol.  China has failed to 
establish that its export quota on one subset of one  form of bauxite is justified pursuant to 
Article XI:2(a) or Article XX(g) of the GATT 1994.  China has also failed to establish that its export 
quotas on coke and silicon carbide are justified pursuant to Article XX(b) of the GATT 1994. 
16. China has attempted to justify the export quota on bauxite only as it applies to a particular 
product that China calls "refractory grade bauxite."  The product that China calls "refractory grade 
bauxite," is actually a subset of "refractory clay " (2508.3000) and not a product considered to be 
within "aluminum ores and concentrates" (2606.0000 ).  Because of the confusion engendered by the 
fact that a product that falls within "aluminum or es and concentrates" (2606.0000) with high alumina 
content is also commonly referred to as "refract ory grade bauxite," the United States will, for 
purposes of clarity and precision, refer to the prod uct for which China asserts its defense, as "high 
alumina clay."  
17. China's selective defense of the export quota imposed on "bauxite" only insofar as the quota 
applies to "high alumina clay" highlights the fact that China's efforts are focused essentially on 
defending a non-existent or fictional measure.  There is no export quota on high alumina clay.  
Because China does not defend the export quota on "bauxite" as a whole, China has already  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 Page A-19 
  
  effectively conceded the inconsistency of that quot a.  The export statistics China cites raise the 
possibility and the serious concern that, through Ch ina's allocation of the export quota on "bauxite," 
China may be effecting an export prohibiti on on "aluminum ores and concentrates."  
18. Even if there were a measure imposing an export quota on "high alumina clay," China's 
defense under Article XI:2(a) as it relates to high alumina clay is without merit.  First, China 
advocates an exceptionally broad meaning of the term  "essential" products in Article XI:2(a) that 
would permit any industrial input to satisfy the meani ng of "essential."  This is an incorrect reading of 
the term "essential."  Even if China's reading of  "essential" were correct, however, China's argument 
is based on several factual inaccuracies regarding the role of high alumina clay in steel production.  
These factual inaccuracies confirm that China's defen se is unavailing. Second, China fails to properly 
analyze the meaning of the term "critical shortage ," and instead bases its defense under Article XI:2(a) 
merely on the limited availability of high alumina clay.  By doing so, China reads the term "critical" 
out of Article XI:2(a) altogether.  This approach is in consistent with the text of Article XI:2(a).  Third, 
the export quota is not "temporarily applied" within th e meaning of Article XI:2(a).  Finally, contrary 
to China's arguments, Article XI:2(a) is an affirm ative defense, for which China bears the burden of 
adducing evidence and argumentation to establish the de fense.  Article XI:2(a) sets out an exception 
to the obligation in Article XI:1, not a separate obligation.   
19. In examining whether China's export quota on bauxite, as applied to high alumina clay, 
relates to the conservation of high alumina clay, the operative question is whether there is a close and 
genuine relationship of ends and means between the goal of high alumina clay conservation and the 
means presented by that part of the export quota that applies to exports of high alumina clay.  As above in the case of fluorspar, the answer to this question is also no. 
20. China also fails to demonstrate that its expor t quota for bauxite, as it applies to high alumina 
clay, is "made effective in conjunction with rest rictions on domestic produc tion or consumption."  
China asserts that it has a "conservation policy" c onsisting of a number of measures "to manage the 
supply, production, and use of [high alumina cl ay]." As discussed below, these measures do not 
constitute "restrictions on domestic  production or consumption." The export quota, which applies to 
the raw material category "bauxite" including both "refractory clay" (2508.3000/2508.300000) and "aluminum ores and concentrates" (2606.0000/2606 000000), is not "made effective in conjunction 
with" such restrictions on "high alumina clay" a nd therefore is not imposed "even-handedly" as 
Article XX(g) requires. Even if China had demons trated the existence of restrictions on domestic 
production or consumption, China w ould still not have demonstrated the requisite even-handedness to 
justify its export quota, as applied to high alumina clay, under Article XX(g). 
21. The United States sets forth its arguments belo w regarding the measures within the Panel's 
terms of reference and the appr opriate measures on which the Pane l's findings and recommendations 
should be made.  Should the Panel, arguendo , review the export restraints as applied by China in 
2010, and should the Panel consider the measur es China implemented over the course of this 
proceeding's pendency through the summer of 2010 relevant to that review, arguendo , the United 
States addresses the export quota on bauxite, as it is a pplicable to high alumina clay, applied in 2010 
in light of those measures below.  As the Un ited States demonstrates, the measures China has 
introduced over the course of 2010 do not alter the fact that China's export quota on bauxite, as 
applied to high alumina clay, is not ju stified under Article XX(g) of the GATT 1994. 
22.
 China contends that the export quotas on coke and silicon carbide are justified pursuant to 
Article XX(b) of the GATT 1994.  China's arguments in support of this defense are the same as those 
advanced in the context of China's export duties on  coke, magnesium metal, and manganese metal.  In 
other words, China argues that the production of coke and silicon carbide result in environmental WT/DS394/R/Add.1 
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Page A-20 
  
  pollution.  The export quotas, according to Chin a, are "necessary" to reduce production of these 
materials in China, and therefor e reduce pollution.  China's defen se fails for the same reasons as 
discussed above in the context of the export duties on magnesium metal, manganese metal, and coke.   
23. For the same reasons China fails to demonstrate that the export duties it attempts to justify 
satisfy the chapeau  of Article XX, China also fails to demons trate that the export quotas it attempts to 
justify satisfy the chapeau  of Article XX. 
IV. TERMS OF REFERENCE ISSUES RELATE D TO CHINA'S EXPORT DUTIES AND 
EXPORT QUOTAS  
24. Both with regard to its theory that measures within the Panel's terms of reference may be 
disregarded, and in its reliance on the 2010 measure s to defend the measures within the Panel's terms 
of reference, China's arguments and assertions are misguided or simply incorrect. China's claim that 
the Panel should exercise its "discretion" not to ma ke findings on the measures within its terms of 
reference is without merit, unsuppor ted by the provisions of the DSU. 
25. Contrary to China's suggestion, the Panel is authorized and charged by the DSU to make 
findings and recommendations on the measures in its  terms of reference – which includes the export 
quotas and export duties applied through the legal in struments that are listed in the panel request. 
26. The legal instruments that took effect on Janua ry 1, 2010 (the January 1, 2010 Measures), i.e., 
after panel establishment, are outside the Panel' s terms of reference.  These legal instruments 
"changed the essence" of the legal instruments that were  in effect at the time of panel establishment, 
and thus are not sufficiently similar to the measures th at are within the Panel's terms of reference to be 
considered in this dispute. Were  the Panel to consider the Janua ry 1, 2010 Measures and the 2010 
Fluorspar and High Alumina Clay Measures adopted in January, March, Apr il, May, and June of 
2010, this would permit China, by changing the paramete rs of the Panel's review, to shield aspects of 
its measures from proper review.  
V. CHINA'S ADMINISTRATION AND ALLOCATION OF ITS EXPORT QUOTAS 
ARE INCONSISTENT WITH CHINA'S OBLIGATIONS UNDER THE ACCESSION PROTOCOL, THE WORKING PARTY REPORT, AND THE GATT 1994 
27. As the United States explained in its first written submission, China's administration and 
allocation of its export quotas are inconsistent w ith China's obligations under the Accession Protocol, 
the Working Party Report, and the GATT 1994.  Chin a has failed to rebut the U.S. showing that 
China's measures restricting access to the export quot as, China's administration of its export quotas in 
a partial and unreasonable manner, and China's to tal award price under the export quota bidding 
regime are inconsistent with China's WTO obligations  
VI. EXPORT LICENSING 
28. The United States demonstrated in its first written submission that China subjects the 
exportation of bauxite, coke, fluorspar, manganese, s ilicon carbide, and zinc to export licensing that is 
non-automatic, in breach of the requirements of Article XI:1 of the GATT 1994.  China itself 
considers its export licensing for products designated for restricted exportation pursuant to Article 19 
of the 
Foreign Trade Law  to be a restriction on exportation inc onsistent with Article XI:1 of the 
GATT 1994.  China has proffered no arguments or facts to justify its export licensing system.  
Accordingly, China has not demonstrated that its  export licensing on the products at issue can be 
justified under the GATT 1994.   WT/DS394/R/Add.1 
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  VII. MINIMUM EXPORT PRICE 
29. The United States has demonstrated that Chin a imposes a minimum export price requirement 
for bauxite, coke, fluorspar, magnesium, silicon carbide , yellow phosphorus and zinc that restricts the 
exportation of these products in contravention of Ar ticle XI:1 of the GATT 1994.  China has failed to 
rebut that showing.  In its first written submission, the United States demonstrated that China failed to 
publish important measures and provisions relating to  its minimum export price requirement.  China's 
only response is that these measures are no longer in effect.  However, a measure no longer being in 
effect is not a defense for the failure to publish under GATT Article X:1.   
30. In its first written submission, the United States also demonstrated that China's administration 
of the minimum export price system through the in volvement of the CCCMC in the Price Verification 
and Chop (PVC) Procedure was partial and unreas onable in breach of China's obligations under 
Article X:3(a) of the GATT 1994.  China has failed to rebut that showing.  
31. On October 1, 2010, the Panel issued the "S econd Phase of the Preliminary Ruling" (Second 
Preliminary Ruling).  The Second Preliminary Rulin g included findings on issues not subject to any 
request for a preliminary ruling.   In particular, the Panel made findings on arguments of China in its 
first written submission that certain minimum export price (MEP) measures addressed by the United States should be outside the Panel's terms of refere nce under Article 6.2 of the DSU.  Because these 
findings in the Second Preliminary Ruling were not made in response to a preliminary ruling request, 
they cannot be part of a preliminary ruling,  and instead, pursuant to the DSU and Working 
Procedures, must be considered as findings that the Panel will reexamine de novo  after considering all 
of the evidence and arguments submitted in the disput e.  Accordingly, the United States sets forth a 
written response to China's arguments in its first written submission.  The United States respectfully 
requests that the Panel consider these responses befo re making findings with regard to China's MEP 
terms-of-reference arguments.   
32. There are three additional measure s that China fails to identify that are within the Panel's 
terms of reference by virtue of  being included in both the cons ultations and panel requests:  Measures 
for the Administration of Trade Social Organizations ; Regulations for Personnel Management of 
Chambers of Commerce ; and CCCMC Charter .  In addition, four measures are in the Panel's terms of 
reference even though they were not identified in  both the U.S. consultations request and the U.S. 
panel request:  CCCMC Export Coordination Measures; B auxite Branch Coordination Measures ; 
Bauxite Branch Charter ; and the "System of self-discipline."  These measures are within the Panel's 
terms of reference because they impl ement the coordination mandate of the 1994 CCCMC Charter 
and the 2001 CCCMC Charter  in the manner described by the Appellate Body in Japan – Film .  
Three measures that were specifically identified in th e panel request but not listed in the consultations 
request are nevertheless included within the Panel's terms of reference: Notice of the Rules on Price 
Reviews of Export Products by the Customs ; CCCMC PVC Rules ; Online PVC Instructions .  These 
measures are all part of the same PVC procedure of which the 2002 PVC Notice  and the 2004 PVC 
Notice , which were consulted on, form a part.  The inclusion of these three measures in the panel 
request did not, "expand the scope of the dis pute" as the Appellate Body described in US – Continued 
Zeroing .  These measures are therefore also properl y within the panel's terms of reference . 
33. China also asked the Panel to refrain fro m making findings on measures because those 
measures have "expired" and findings would "serve  no purpose." China also asserted that the Panel 
has no authority to make recommendations on th ese measures. The Panel has the authority and 
obligation to make findings and recommendations on certain measures which, contrary to China's 
arguments and assertions, continue to be in effect. The Panel has the authority and obligation to make WT/DS394/R/Add.1 
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  findings and recommendations on the other measures in order to secure a positive solution to this 
dispute.  
VIII.  CONCLUSION 
34. For the reasons set forth in this submission, the United States respect fully requests the Panel 
to find that China's measures, as set out above, ar e inconsistent with China's obligations under the 
GATT 1994 and the Accession Protocol.  The United St ates further requests, pursuant to Article 19.1 
of the DSU, that the Panel recommend that Chin a bring its measures into conformity with the 
GATT 1994 and the Accession Protocol. 
  WT/DS394/R/Add.1 
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 ANNEX A-5 
 
EXECUTIVE SUMMARY OF THE OP ENING ORAL STATEMENT OF  
THE UNITED STATES AT THE SECOND SUBSTANTIVE MEETING 
  
1. China maintains a number of restraints on the exportation of important raw materials for 
which China is one of the world's leading producers.  The export r estraints that China maintains on 
these raw materials are inconsistent with paragraph 11.3 of China's Accession Protocol and 
Article XI:1 of the GATT 1994 respectively.  Although China has asserted no defense with respect to several of the export restraints, China does invoke exceptions under Article XX of the GATT 1994 in relation to certain of the restraints.  None  of China's defenses withstands scrutiny. 
2. Article XX Exceptions of the GATT 1994 Are Not Applicable to China's Commitments 
in Paragraph 11.3 of the Accession Protocol :  The exceptions in Article XX of the GATT 1994 are 
not available as a defense to a breach of the commitments in paragraph 11.3 of the Accession 
Protocol.  The non-applicability of Article XX is pl ain from the text of paragraph 11.3, read in its 
context. The application of the Appellate Body's reasoning in China – Audiovisual Products further 
shows that Article XX cannot be used in an a ttempt to justify a breach of paragraph 11.3. 
3. China's Export Duties on Coke, Magnesium , Manganese, and Zinc and Its Export 
Quotas on Coke and Silicon Carbide Do Not Satisfy the Criteria Set Out in Article XX(b): The 
evidence is abundant that China's export restraints are not environmental measures, but instead were 
adopted to support China's industries that use the raw materials covered in this dispute. Even China's 
statements prepared for presentation to this Panel betr ay that the export restraints at issue are in place 
to promote China's economic advancement.  Ch ina relies heavily on high-level government policy 
documents that express a goal of "c ontrolling" or "restricting" the e xport of high-energy-consumption, 
highly polluting, or resource-intensive products. But, other high-level Chinese government documents 
place the intention to control the export of highl y-polluting products in the context of China's 
economic policies. The structure of China's me asures also shows that their objectives are the 
promotion of the export of higher value-added dow nstream products, not environmental protection.  
China's measures are restraints on e xports of raw materials, but the export of the materials at issue is 
unrelated to environmental pollution.  Thus, there is no environmental justification for discriminating 
against users of the raw materials outside China vi s-a-vis users inside China. At best, the export 
restraints at issue may have indirect, incidental environmental benefits. China's argument that an 
indirect relationship between the measure and the stated objective is irrelevant is illogical and 
unpersuasive. Each claimed Article XX defense must be examined on its own merits, in light of the 
facts and circumstances of the particular dispute. The fact that a measure could, at best, make an 
indirect contribution to the stated objective, is quite  relevant to the question of whether the measure at 
issue satisfies the requirements of Article XX(b).   
4. The post hoc environmental justification presented by the consultants that China has retained 
for the purposes of this dispute provides further conf irms that China's defense under Article XX(b) is 
without merit.  An examination of those arguments  shows that China has pr esented no evidence that 
the export restraints are making a material contribu tion to China's stated environmental objective.  
The economic model by Dr. Olarreaga is flawed and unr eliable.  China also fa ils to submit evidence 
that the export duties on scrap products have resu lted in increased levels of secondary production of 
magnesium metal, manganese metal and zinc.  China' s consultant, Dr. Humphreys, has also made a 
number of additional assertions that are unsupported by  any evidence or are highly speculative.  China 
also has no legitimate response to the fact that if China is concerned with the environmental impacts 
of raw material production, China has reasonably av ailable alternatives that would directly address WT/DS394/R/Add.1 
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 China's supposed environmental concerns.  As a re sult, China cannot meet its burden of establishing 
that its measures are "necessary" for the protection of  human life or health.  China has also not met its 
burden of establishing that environmental contro ls on production would likewise not meet China's 
goals. China's reliance on Brazil – Tyres in this regard is also misp laced.  With respect to the chapeau  
of Article XX, China has not even made a serious attempt to show that its measures meet the chapeau 's requirements, despite the fact that China has the burden to do so. 
5. Finally, the Panel might consider the serious negative systemic implications of a contrary 
finding.  As it relates to the export restraints on the metals, coke, and silicon carbide, China's defense 
would permit a WTO-inconsistent export r estriction on any product whose production causes 
pollution, simply because the export restriction could lead to reduced production of the product at issue.   With respect to scrap products, China' s defense suggests that a WTO-inconsistent export 
restraint may be imposed on any industrial input on the grounds that it is more environmentally 
friendly than other industrial inputs.  
6. China Has Not Established that Its Export Duties and Export Quotas on Fluorspar and 
Bauxite Satisfy the Requirements of Article XX(g):  China's Article XX(g) arguments only apply to 
export duties on fluorspar and that portion of its export quota on bauxite covering high alumina clay – 
which is only one of the several forms of baux ite covered by China's bauxite quota. These export 
restraints are not conservation measures under the Article XX(g) exception.  China has attempted to 
bolster its Article XX(g) arguments by taking actio ns over the course of 2010 – indeed, while this 
matter is under the Panel's consideration – to redu ce the number of export restraints imposed on 
fluorspar and bauxite and to introduce a number of measures directed at the production of fluorspar 
and high alumina clay (the 2010 Fluorspar and Hi gh Alumina Clay Measures).  China's efforts to 
make these export restraints appear more like conservation measures in 2010 are also unavailing. 
7. The focus of "conservation" is protective oversi ght exercised to benefit the state, use, or 
amount of the natural resource.  The export restra ints on fluorspar and high alumina clay benefit 
China's domestic users of fluorspar and high al umina clay by providing them with an important 
advantage over their foreign competitors. China strain s to incorporate into the term "conservation" the 
concept of self-interested economic and social gain.  China's interpretation of the term "conservation" 
must be rejected because it would subvert the GATT 1994's disciplines on export restraints and non-discrimination .   
8. The second clause of Article XX(g) requires that an otherwise non-conforming measure be 
"made effective in conjunction with restrictions on domestic production or c onsumption," which is "a 
requirement of even-handedness  in the imposition of restrictions."  The pre-2010 measures China has 
proffered as constituting components of  a conservation program are not domestic restrictions and even 
in China's own view, are not sufficient to est ablish a defense under Article XX(g).  The 2010 
Fluorspar and High Alumina Clay Measures also are not restrictions under Article XX(g) because the 
mining and production targets are set at levels highe r than actual mining and production, showing that 
they are not intended to restrict the amount of fluorspar produced in 2010. Additionally, China's 
measures are not even-handed.  The facts here, as in Canada – Herring and Salmon , present an easy 
case under Article XX(g): the export restraints on fl uorspar high alumina clay are imposed primarily 
to benefit China's domestic processors – at the ex pense of foreign processors.  Using an example, 
China argues that its export restraints work togeth er with production restrictions to create domestic 
consumption restrictions on fluorspar and high al umina clay, making them even-handed.  China's 
hypothetical is fundamentally flawed in at least four important ways.  Its measures are not even-
handed.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 Page A-25 
  
 9. China's Export Quota on Bauxite as Applied to High Alumina Clay Is Not Justified by 
Article XI:2(a) :  China's defense under Article XI:2(a) as it relates to a subset of one of the products 
subject to an export quota on bauxite does not withstand scrutiny. First , China's defense only relates 
to one subset of one of the products on which China imposes its export quota. Second , China's 
assertion that the complaining party bears the burden of establishing that the conditions of Article XI:2 are not met is without merit.  The Appellate Body's clear statement in US – Shirts and 
Blouses  confirms the US position that Article XI:2(a) is  an affirmative defense.  And, contrary to 
China's suggestion, the Appellate Body's reasoning in that dispute is not "obsolete"  Third , while 
China's argument regarding "essentialness" requirement  places great weight on the supposed lack of 
substitutes for high alumina clay in steel production, there are a number of substitutes, including certain of the other forms of bauxite on which Ch ina maintains its export quota.  Moreover, China's 
reading of "essential" would severely w eaken the disciplines in Article XI:1. Fourth , China's 
arguments regarding the supposed "critical shortage" of high alumina clay reflect an improper reading 
of the relevant terms.  The mere limited amount of  reserves of a product is not sufficient to amount to 
a critical shortage.  Similarly, the existence of  supply constraints does not establish a "critical 
shortage" for purposes of Article XI:2(a).  While Ch ina has failed to establish that its export quota as 
applied to high alumina clay satisfies the requirements of Article XI:2(a), China's statements in this 
dispute do confirm that the objective of the export qu ota on bauxite is the rapid and dramatic growth 
of China's steel industry.  
10. The United States Is Entitled to Findings and Recommendations on the Export Quotas, 
Duties, and Export Licensing Re quirements Effective in 2009:  The United States is entitled to 
findings and recommendations on the fluorspar export quota, the bauxite export duties, and the yellow 
phosphorus special export duties.  China has not conceded the WTO inconsistency of these export 
restraints and they are susceptible to quick and easy re-imposition by China.  Accordingly, findings 
and recommendations on these measures are critical to securing a positive solution to this dispute.   
11. China's Argument that the Panel Should Make Findings and Recommendations Only on 
the Export Restraints Effect ive in 2010 Must Be Rejected:  The changes that China made to the 
scope of its export quotas and export duties in 2010 changed the essence of the measures in the 
Panel's terms of reference (i.e., the ones imposed in 2009).  Reviewing the export restraints only as 
they were modified and maintained in 2010 would shield from review aspects of the export restraints 
and permit China to create a "moving target" that impinges on the rights under the DSU afforded to 
complainants.  Furthermore, it is not consideration of China's defenses that would be untimely if the 
Panel limited its review to the measures within its terms of reference, what is untimely is China's 
belated efforts to introduce measures that it consid ers helpful in satisfying the requirements of the 
defenses it has invoked in this dispute.  Fi nally, making findings a nd recommendations on 2010 
measures because 2009 measures have "expired" is cl early not the correct approach – logically or 
practically – for the settlement of disputes at the WTO,  and it is not one that finds support in the text 
of the DSU.  
12. China's Measures Administering and Allocating the Export Quotas Are Inconsistent with 
China's Obligations Article X:3(a) of the GA TT 1994:  China argues, citing language from the 
Appellate Body Report in US – OCTG Sunset Review that the United States has not substantiated this 
claim "through 'solid evidence.'"  The nature of this Article X:3(a) claim is distinct from the one made 
in US - OCTG Sunset Review and is similar to the one made in Argentina – Leather .  The United 
States has adduced arguments and evidence that are more than sufficient, in quantity and quality, to 
substantiate these claims.  
13. Export Licensing : Whether China wishes to call its export licensing requirements 
"automatic" or "non-automatic," export licensing maintained under Articles 16 and 19 of the Foreign WT/DS394/R/Add.1 
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Page A-26 
  
 Trade Law  provides China with the authority, the ability, and the discretion to control and restrict the 
exportation of the subject products. China's i nvocation of the Import Licensing Agreement is 
inapposite to this claim regarding its export licensi ng. Finally, the Article XI:1 prohibition on import 
and export restrictions extends to more than ju st limits on the quantity of  imports and exports.  
Article XI:1 has been consistently interpreted by GATT 1947 and WTO panels to cover restrictions 
on importation and exportation that are not limited to "quantitative" restrictions. 
14. The Minimum Export Price Requirement Is In consistent with Article XI:1 of the 
GATT 1994 :  With respect to China's argument that  no single MEP-related measure appears to 
impose a minimum export price requirement, the United States observes that an export restraint, like 
any other measure, can consist of a number of sepa rate and distinct legal instruments that work 
together to affect trade.  Furthermore, in relation to the terms of reference issues, to the extent that 
MEP-related legal instruments set forth in the US submissions are considered not to be within the 
Panel's terms of reference, tho se legal instruments are neverthele ss evidence of the existence of a 
minimum export price system that must be consid ered in the Panel's review of this claim under 
Article XI:1. 
15. Conclusion :  As a final note, China asserts in its  second written submission that the United 
States has abandoned certain claims.  This is not corr ect.  To clarify any confusion, the United States 
is also providing, as Exhibit US-1, a chart of the US claims in this dispute. 
  WT/DS394/R/Add.1 
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 WT/DS398/R/Add.1 
 Page A-27 
  
  ANNEX A-6 
 
CLOSING ORAL STATEMENT OF THE UNITED STATES AT THE SECOND 
SUBSTANTIVE MEETING 
 
 1. Mr. Chairman, members of the Panel, we woul d like to thank you and the Secretariat staff 
assisting you for your efforts during th is panel meeting and throughout this  proceeding.  As this is our 
last opportunity to address you in person, we woul d like to take a few moments to touch on some of 
the issues raised in this dispute. 
I. ARTICLE VIII:1 OF GATT 1994 
2. To begin, we would like to address a few ar guments presented by China regarding the US 
claim that China's total award price requirement maintained as part of China's administration of the 
export quotas on bauxite, fluorspar, a nd silicon carbide is inconsistent  with China's obligations in 
Article VIII:1 of the GATT 1994, because it constitut es a fee or charge imposed in connection with 
exportation and is not limited to the approximate cost  of services rendered.  We would like to make 
four points in response to the arguments  China has raised in its submissions. 
3. First, China's oral statement yesterday confir ms that nothing remains of China's contention 
that the total award price falls outside the scope of Article VIII.  As the United States has set forth, the 
total award price is a fee or charge imposed in co nnection with exportation that  is not limited to the 
cost of services rendered.  And, China has no respon se to this. Therefore, we urge the Panel to find 
that the total award price is inconsistent with Article VIII:1(a). Having no valid textual argument, 
China proceeds to offer distractions in the form of  example mis-characterizations of the measures of 
other Members, and statements about the s upposed implications of the Panel's finding. 
4. Second, China contends without proper basis that  the United States is a keen supporter of the 
use of auctions to allocate quotas.  Even beyond the fact that US measures are not at issue here, none 
of the supposed examples presented by China in pa ragraphs 388-95 of its second written submission 
involve the use of auctions to allocate a quota – im port or export.  Accordingly, these "examples" – 
even if they were relevant to the Panel's assessme nt of China's measures – bear no relationship to the 
use of auctions to allocate a quota. 
5. Third, China contends that the GATT 1994 does not  prescribe a specific means of allocating a 
quota.  But, this is beside the point.  Even if China were correct that the GATT does not prescribe a 
particular means of allocating a quota, GATT 1994 Artic le VIII:1(a) prohibits a fee or charge imposed 
in connection with exportation that is not limited to the cost of services rendered.  As the total award 
price requirement imposed by China is such a fee or charge, it is prohibited by the GATT 1994. 
6. Fourth, while China had asserted in its second written submission that the WTO covered 
agreements neither prescribe nor condone any specifi c means of quota allocation, China contended in 
yesterday's oral statement that WTO Members have  agreed on rules that discipline how quotas must 
be allocated, presumably in order to establish a ba sis for invoking Article XIII:2 of the GATT 1994 as 
context.  China's reliance on Article XIII:2 is, in any event, misplaced.  Not only is Article XIII:2 
limited to import restrictions, it is silent on the quest ion of fees.  Furthermore, Article XIII:2 does not 
work even by analogy since it does not – to u se China's terms – prescribe or condone any specific 
means of quota allocation. WT/DS394/R/Add.1 
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  II. ARTICLE XX(B) OF GATT 1994 
7. Turning to China's defense under Article XX(b),  China wants to rewrite Article XX(b) to 
allow GATT-inconsistent measures that are necessary  for economic growth.  But, that is not what 
Article XX(b) provides. Article XX(b) permits a GATT-inconsistent measure that is "necessary to 
protect human, animal or plant life or health."  And, to respond to the point that China has both economic and environmental goals, we agree with  China and the passage from the European Union 
document that China cites that these goals are not necessarily competing goals.  However, that tells us nothing about whether China is acting in conformity with its WTO obligations.  As we stated in our 
second written submission, the WTO rules provide a firm foundation for international trade and 
development; contrary to China's argumentation, China's pursuit of its economic objectives neither 
justifies China's breach of those rules nor provid es a basis for reading the WTO Agreement so as to 
weaken or nullify those rules. 
8. To briefly summarize another point in relation to the Article XX(b) defense, China's failure to 
analyze the downstream effects highlights our main po int that a measure restricting only foreign users 
of raw materials is not in fact an environmental me asure at all.  Rather, it is a measure intended to 
benefit its domestic industry that uses the raw materials. 
9. If China were concerned about the environmental effects of raw material production, it would 
adopt measures – such as production controls or polluti on controls – that directly affect environmental 
effects of raw material production.  
10. China's assertions of a comprehensive regulator y framework for environmental protection are 
not supported by the evidence.  The export restraints are not part of any such framework.  Furthermore, the existence of domestic environmen tal regulations – the effects and effectiveness of 
which China was not able to tell us today – is not sufficient to establish that such measures are not 
available as alternatives for purposes of Article XX(b).  And, China's arguments to the contrary reflect 
a mis-reading of the Appellate Body report in Brazil – Tyres .   
III. ARTICLE XX(G) OF GATT 1994 
11. Our sessions yesterday and today were help ful in crystallizing important issues on 
Article XX(g). 
12. China has conceded that its restrictions on fl uorspar and bauxite prior to the introduction of 
the 2010 fluorspar and high alumina clay measu res (2010 Measures) was not justified under 
Article XX(g).  Accordingly, we heard China say that: 
 The quota on fluorspar and the duties on ba uxite were "withdrawn" in recognition of 
their WTO-inconsistency; and 
 The duties on fluorspar and the quota on bauxite – as it is applied to high alumina 
clay – were WTO-inconsistent until the 2010 Measures took effect. 
 This means that the Panel's Article XX(g) revi ew is limited now only to an examination of 
whether the 2010 Measures satisfy the requirements of Article XX(g).   
13. This implicates the question of the Panel's terms of reference and how the 2010 Measures 
relate to the measures challenged by the complainants in this dispute.  We have made our views clear 
today that the 2010 Measures may be considered as ev idence to the extent they are relevant for  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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  findings on the challenged measures as they existe d on the date the DSB established this Panel.
6  We 
also made clear our view that the Panel could examine the 2010 Measures for purposes of making in-
the-alternative or arguendo  findings that the 2010 Measures do not, in any event, satisfy the 
requirements of Article XX(g). 
14. The United States would like to focus on Chin a's representation today that its 2010 Measures 
are the measures addressed to the conservation of r esources while its export restraints are addressed at 
"allocating" those resources, once they have been produced.  This underlies an important flaw in 
China's Article XX(g) argument:  China focuses on presenting the question as one of allocating the 
shares of the resources.  However, the disciplines at issue are addressed to the terms of trade in those 
resources, which must be non-discriminatory. 
15. This also raises the issue of China's chapeau argument in the context of Article XX(g), which 
China articulated for the fi rst time in its Second Oral Statement yesterday.  We would like to make 
two points in response. 
16. First, China tries to distinguish the Appellate Body's clear statement in US – Gasoline  that the 
non-discrimination in the Article XX chapeau applies on not only an MFN basis but also a national treatment basis.  China argues that US – Gasoline  should be distinguished on the grounds that the 
measure at issue in US – Gasoline  was an import restriction while the measures at issue in this dispute 
are export restraints.  This is not a basis for making such a distinction.  
17. Second, China argues that any resulting discrimin ation from the application of its measures is 
not unjustifiable discrimination because it is unique ly positioned as a "resource-endowed country that 
enjoys a sovereign right over natura l resources found within its territory.
7  We would all be in trouble 
if it were true that China were unique in this way.   But it is not true.  And because it is not true, it 
would be detrimental to the multilateral trad ing system to endorse China's arguments on 
Article XX(g). 
IV. CONCLUSION: CHINA'S LITIGATION STRATEGY 
18. In concluding, the United States notes that, earlie r today, China imputed to the United States a 
particular litigation "strategy."  In fact, to the exte nt that we have a litigation "strategy," it is very 
straightforward: 
 The United States did not bring this case lightly. 
                                                      
6 See EC – Customs (AB) , para. 186 ("We agree with the conclusion  of the Panel that 'the steps and acts 
of administration that pre-date or post-date the establishment of a panel may be relevant to determining whether 
or not a violation of Article X:3(a) of the GATT 1994 exists at the time of establishment .'") (italics added); 
para. 187 ("[T]he Panel's review should therefore have focused on these legal instruments as they existed and 
were administered at the time of establishment of the Panel .") (italics added); para. 254 ("As we explained 
above, had the Panel properly identified the measures at issue, its task would have been to determine whether 
the measures at issue had been admini stered collectively in a uniform manner at the time the Panel was 
established , that is to say, in March 2005.  In order to make this determination, the Panel could rely on evidence  
that pre-dated or post-dated the time of the Panel's establishment to the extent that it was evidence relevant for 
the assessment of whether the European Communities acted consistently with Article X:3(a) at the time of the Panel's establishment .) (third set of italics added; footnotes omitted); para. 259 ("In any event, although Exhibits 
EC-167, EC-168, and EC-169 might have arguably supported the view that uniform administration had been 
achieved by the time the Panel Report was issued, we fail to see how these exhibits showed uniform 
administration at the time of the establishment of the Panel .") (italics added).   
7 China's opening oral statement at th e second panel meeting, para. 223. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page A-30 
  
   US industries using these resources have st ruggled under China's export restraints. 
 We have raised our serious concerns re garding these export restraints with China 
many times, over many years. 
 We devoted serious time and energy to trying to resolve our differences and concerns 
and to researching and reviewing China's measures – both the export restraints and 
any production measures – to try to understand the situation. 
 When we could not resolve our concerns, we initiated a formal dispute at the WTO 
on these export restraints. 
19. It is China that has deployed a clever litigation "strategy" here.  By manipulating its export 
measures and introducing new measures, China has a rranged a matrix of restraints and defenses to 
maximize its ability to find the one formula th at will provide it with a roadmap to justify all of its 
export restraints – both the ones at issue in this di spute and the myriad export restraints China imposes 
that are not within the scope of this dispute.  China has asserted: 
 An Article XI:1 defense for a quota; 
 An Article XX(g) defense for a quota; 
 An Article XX(g) defense for a duty; 
 An Article XX(b) defense for duties; 
 An Article XX(b) defense for quotas; and 
 An Article XX(b) defense for the combination of both a quota and a duty. 
20. This strategy reinforces the post hoc  nature of China's defenses.  These restraints have existed 
for a long time.  These defenses have existed in the GATT 1994 for a long time.  And the goals served 
by these defenses have been present fo r an even longer time.  However,  China's efforts to justify these 
measures and to connect particular measures to par ticular defenses and goals  are new – and presented 
for the purpose of this litigation. China has expr essly acknowledged this today in the context of 
Article XX(g). 
21. The United States asks the Panel to see China's efforts for what they are and to find 
accordingly.  We thank you for your attention. 
 
_______________ 
 
   WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-1 
  
  ANNEX B 
 
SUBMISSIONS OF THE EUROPEAN UNION 
 
CONTENTS PAGE 
B-1 Executive Summary of the first written submission of the European Union B-2 
B-2 Opening oral statement of the Eur opean 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 written submission of the European 
Union B-12 
B-5 Executive Summary of the opening and closing oral statements of the 
European Union at the second substantive meeting B-16 
 
 WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-2 
  
  ANNEX B-1 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF  
THE EUROPEAN UNION 
 
 1. China subjects the exportation of the Raw Material s to four types of restrictions: (a) export 
quotas; (b) export duties; (c) export licenses; and (d) minimum export price requirements. These 
export restrictions are incompatible with a nu mber of provisions of the GATT and of China's 
Accession Protocol. 
1. Export Quotas 
2. China imposes export quotas on a number of Raw Materials. These export quotas are imposed 
through a number of measures, including Chin a's Foreign Trade Law, Regulation on the 
Administration of the Import and Export of Goods, Measures for the Administration of Export 
Quotas, Measures on Export Quota Bidding and a num ber of administrative decisions, notices and 
announcements which, among other things, list the par ticular Raw Materials that are subject to export 
quotas each year, list the conditions for the allocati on of the export quotas and describe the allocation 
of export quotas to particular enterprises. 
3. The European Union considers that these export q uotas are inconsistent with Article XI of the 
GATT.  The European Union also considers that th ese export quotas are inconsistent with Article 1.2 
of China's Accession Protocol, in combination w ith paragraphs 162 and 165  of the Working Party 
Report. 
4. In addition, China fails to publish the total export quota amount for Zinc ores and 
concentrates, the conditions for the allocation of  these export quotas and invitations for applicants 
interested to obtain such export quotas. The Europe an Union considers that, through this practise, 
China effectively sets an export quota of zero quantity for Zinc ores and concentrates and, therefore, prohibits the exportation of Zinc ores and concentrat es. The European Union considers that this is 
inconsistent with Article XI of the GATT and w ith Article 1.2 of China's Accession Protocol in 
combination with paragraphs 162 and 165 of the Wo rking Party Report. If China allocates such export 
quotas to some enterprises, then China's failure to properly and timely publish the rules for the 
allocation and the invitation for applications is  inconsistent with Article X:1 of the GATT. 
5. China also fails to publish the total amount of the export quota for Coke.  The European 
Union considers that this is inconsis tent with Article X:1 of the GATT. 
2. Allocation of quotas 
6. The European Union considers that a number of conditions that China imposes on applicant 
enterprises in order to grant them export quot as are inconsistent with the GATT and China's 
Accession Protocol.  These conditions include the following. 
7. First, applicants must have achieved a certain  volume of exports during the previous years. 
The European Union considers that this condition is inconsistent with Article  5.1 and Article 1.2 of 
China's Accession Protocol, in combination with pa ragraphs 83(a) and 83(d) of the Working Party 
Report. These provisions expressly provide that China should eliminate the "prior experience" 
requirement as a condition for the gr ant to enterprises of th e trading right to export goods from China, 
including the Raw Materials.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-3 
  
  8. In addition, this condition has the effect of  preventing new applicants from obtaining an 
export quota (because new applicants would not ha ve the requisite prior exportation experience). 
Foreign companies are more likely to be "new appli cants", than Chinese compan ies. As a result, this 
condition restricts the foreign companies' tradi ng rights to export the Raw Materials. For these 
reasons, the European Union considers that this condition is inconsistent  with Article 5.2 and 
Article 1.2 of China's Accession Protocol in comb ination with paragraphs 84(a) and 84(b) of the 
Working Party Report. 
9. Second, applicants must have a minimum re gistered share capital.  The European Union 
considers that this condition is in consistent with Article 5.1 and Article 1.2 of China's Accession 
Protocol, in combination with pa ragraphs 83(b), 83(d) and 84(a) of  the Working Party Report. These 
provisions require China to eliminate the minimum re gistered share capital requirement, together with 
the examination and approval system for the grant of the trading right to export goods (including the Raw Materials) at the end of the "ph ase-in" period, i.e., the end of 2004. 
10. Third, applicants must posses "business manage ment capacity". China's authorities have the 
right to refuse the grant of export quotas to enterp rises which, in the Chinese authorities' view, do not 
possess such "business management capacity". Ther e is no definition of "business management 
capacity" in Chinese legislation. This condition is vague and opaque and allows the Chinese 
authorities unfettered discretion on whether to accept  or refuse applications for export quotas. The 
European Union considers that this allows China to  administer its export quota allocation system in a 
manner which is not consistent  with GATT Article X:3(a). 
3. Export duties 
11. Article 11.3 of China's Accession Protocol provides that China would not impose any duties, 
taxes or other type of charges on the exportation of  goods, with two exceptions: (a) export duties up to 
a certain expressly defined duty rate on a list of  goods included in Annex 6 of China's Accession 
Protocol or (b) if such taxes and charges are applie d in conformity with the provisions of Article VIII 
of the GATT 1994. 
12. Despite these commitments, Ch ina imposes export duties on a number of Raw Materials 
which are not included in Annex 6 of China's Accession Protocol. By their very nature, these export duties do not fall within the scope of Article V III of the GATT. For these reasons, the European 
Union considers that those export duties are inc onsistent with Article 11.3 of China's Accession 
Protocol. 
13. In addition, China imposes export duties on Ye llow Phosphorus. This is one of the raw 
materials which is included in Annex 6 of China' s Accession Protocol. However, the rate of export 
duty imposed on it exceeds the maximum rate of duty provided for in Annex 6.  For this reason, the 
European Union considers that this export duty imposed by China on yellow phosphorous is 
inconsistent with Article 11.3 of China's Accession Protocol. 
4. Export Licensing 
14. China subjects the exportation of a number of  Raw Materials to a non-automatic licensing 
obligation. The European Union considers that this non-automatic export licensing obligation is 
inconsistent with Article XI of the GATT and w ith Article 1.2 of China's Accession Protocol, in 
combination with paragraphs 162 and 165 of the Working Party Report. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-4 
  
  15. In addition, China may refuse the grant of expor t licenses to particular enterprises on the basis 
of a number of criteria and conditions. These criteri a and conditions include the Chinese authorities' 
assessment of the applicants' "management qualificat ions", as well as "other documents of approval" 
issued by China's Ministry of Commerce at its so le discretion. The Chinese authorities also have the 
discretion to require applicants to produce unde fined "other documents" in support of their 
application. These criteria and conditions allow the Chinese authorities excess ive discretion to accept 
or refuse applications for export licenses on the basi s of non-objective justifications. This is why the 
European Union considers that these criteria and c onditions are inconsistent with Article 5.1 and 
Article 1.2 of China's Accession Protocol, in combin ation with 83(d), 84(a) and 84(b) of the Working 
Party Report. 
16. In the alternative to the previ ous claim, the European Union considers that China's failure to 
publish sufficient definitions and e xplanations on the interpretation of these criteria and conditions is 
inconsistent with GATT Article X:1. 
17. Moreover and again in the alternative, the Europ ean Union considers that this nexus of vague 
and opaque criteria and conditions, t ogether with the corresponding discretion allowed to the Chinese 
authorities, make China's administration of its export licensing system inconsistent with GATT 
Article X:3(a). 
5. Minimum Export Price Requirement 
18. China has set up a system whereby it controls  the prices at which the Raw Materials are 
exported and ensures that exportation takes place only at a price equal or above a set minimum export 
price. This system is imposed through a number of measures, including the rules of operation of the 
relevant Chinese Chamber of Commerce, China's ru les on export licensing and China's customs laws 
and regulations. The minimum export price system is enforced through (a) " self-discipline " among 
exporters, within the context of the operation of the relevant Chinese Chamber of Commerce; 
(b) penalties imposed by China's Ministry of Co mmerce; (c) China's export license issuing entities; 
and (d) China customs' authorities. 
19. The existence of the minimum export price system  has been confirmed by China's Ministry of 
Commerce in statements made and documents subm itted in various court proceedings in the United 
States. It has also been confirmed by Chinese exporters and members of the relevant Chinese 
Chamber of Commerce in court proceedings in the United States. However, the operation of the 
minimum export price system is largely opaque, because it is based on rules that are not published.   
20. China's legal framework on the minimum export price system is highly non-transparent. 
Although evidence demonstrates that certain measures related to the establishment and functioning of 
the minimum export price requirement do exist, they remain unpublished or were not published 
promptly. For example, the 2001 CCCMC Charter  was published only eight years after it came into 
effect. The European Union considers that China's failure to publish its laws , regulations, decisions 
and administrative rulings pertaining to the minimu m export price requirement is inconsistent with 
Article X:1 of the GATT. 
21. In addition, China administers the minimum export price system for yellow phosphorus 
through the enhanced enforcement procedure known as the "Price Verification and Chop" procedure. 
This procedure requires the participation of the CCCMC in the export clearance process. The 
European Union considers that CCCMC's role in verifying export contracts in the Customs clearance 
process and the danger of inappropriate flow of sensitive business information constitute unreasonable 
and partial administration which is inconsis tent with Article X:3(a) of the GATT.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-5 
  
  22. For the reasons set forth in this submission,  the European Union respectfully requests the 
Panel to find that China's measures, as set out a bove, are inconsistent with China's obligations under 
the GATT 1994 and the Accession Protocol. The Eur opean Union further requests, pursuant to 
Article 19.1 of the DSU, that the Panel recommend th at China bring its measures into conformity with 
the GATT 1994 and the Accession Protocol. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-6 
  
  ANNEX B-2 
 
OPENING ORAL STATEMENT OF  THE EUROPEAN UNION  
AT THE FIRST SUBSTANTIVE MEETING 
  
1. In addition to our views on the issues addressed in the joint oral statement, the European 
Union would like to clarify a few points of fact. These are points of fact underpinning both the 
European Union's claims and China's defence in the fields of Export Licenses and Export Quotas. 
I. CHINA'S ASSERTIONS IN RELATION TO ITS EXPORT LICENCES 
2. We begin with China's assertions in relation to its export licenses. 
A. A
RE CHINA 'S EXPORT LICENSES AUTOMATIC OR NON -AUTOMATIC ? 
3. China asserts vigorously that its export licensi ng system is "automa tic" (in paragraph 783). 
China includes in its first written submission offici al statements issued by the competent Chinese 
authorities and confirming that Chinese law does not allow its license issuing agencies any discretion 
to reject applications for export licenses (in pa ragraph 777). Official statements of the Chinese 
authorities confirm that Chinese law extends this "automaticity" to all goods subject to an export 
licensing requirement, irrespective of whether they are also subject to an export quota or not (in 
paragraphs 773 and 774). 
4. China also provides official statements from its competent authorities stating that Chinese law 
allows its export license issuing agencies to perform only a review of a purely procedural nature (in 
paragraph 771). If the required doc uments are there, Chinese law ob liges the agencies to grant the 
export license automatically.  China asserts that its authorities have always granted all export licenses 
applied for, provided that the required documents were duly submitted together with the application 
(in paragraph 776). 
5. China also asserts that Chinese la w provides for an exhaustive list of documents that must be 
submitted together with the application (in paragr aph 793) and that Chinese law does not allow its 
license issuing agencies any discretion to requ est additional documents (in paragraph 795). 
6. The European Union welcomes these unequivo cal official statements, issued by the 
competent Chinese authorities and interpreting the Ch inese legislation and regulation in relation to 
China's export licenses. The European Union invites the Panel to incorporate these statements in its 
final Report to the DSB.  The European Union notes  that these statements have a legal importance, 
which was confirmed in the report of the panel in case DS152, known as US – Section 301 Trade Act . 
7. If this was indeed the proper interpretation of  China's regulation of its export licensing 
system, then the European Union would not have rai sed claims against it in the present dispute. The 
European Union has engaged in this dispute settleme nt procedure in good fa ith and with a view to 
resolve the dispute, as required by the DSU. 
8. However, there are a few points of fact that seem to indicate that the story may not be as 
China presents it in its first written submission. Th e European Union would be most interested in 
hearing, together with the Panel and the other participants, China's explanations on the following 
points.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-7 
  
  9. The first point is the relation between the provi sions of Article 15 and Article 19 of China's 
Foreign Trade Law.  These provisions draw a dis tinction between, on the one hand, "freely exported 
goods", which may be subject to automatic export licenses and, on the other hand, goods "subject to 
export restriction" through an export license. The onl y logical interpretation of these provisions is that 
the export licenses imposed on the second category of goods are not automatic. Otherwise, why would 
such a second category of goods exist? 
10. China tries to argue that the word "restriction" in its legislation should not be interpreted as a 
"restriction" in the sense of the GATT. But we are not discussing the interpretation of the GATT at 
this stage.  We are exploring a simple point of f act.  Does the Chinese legislation treat differently the 
goods "subject to export restriction", from the goods that are "freely exported"? Are the export licenses provided for in Article 19 of the Foreign Trade Law as "automatic" as the export licenses provided for in Article 15 of the Law? Do the Chin ese license issuing agencies have the discretion to 
refuse the grant of Article 19 licenses for different reasons than the Article 15 licenses?  And, most 
importantly: the export licenses imposed on the Raw Mate rials at issue in this case, are they based on 
Article 15 or on Article 19 of the Law? We would be  most interested to h ear China's responses to 
these questions. 
11. The second point that we would like to discuss is what is required by applicants in order to 
get an export license. China asserts in paragraph 816 of its first written submission that its law 
provides for an exhaustive list of documents to be subm itted together with the application.  But is this 
list of documents really exhaustive? 
12. China provides a list of these documents in paragraphs 793 and 794 of its first written 
submission. The footnotes in these paragraphs refer to Article 11 of the Measures for the 
Administration of Export Licenses. They cover paragr aphs 1 to 4 of Article 11. But, there is no 
reference to paragraph 7 of Article  11.  And what does paragraph 7 say?  It says that "for other goods 
subject to export licensing, the export licenses sha ll be issued on the basis of the documents of 
approval issued by the Ministry of Commerce". 
13. The "other goods" are goods that are not subject to an export quota.  In the present case this 
would cover Manganese and certain types of Zinc, as  China acknowledges in paragraph 817 of its first 
written submission.  But, what are these other "doc uments of approval issued by the Ministry of 
Commerce"?   
14. China asserts in paragraphs 817 and 822 of its first written submission that none were 
required for Manganese and unwrought Zinc in 2010.   But, which provision of Chinese law imposes a 
restriction on the Ministry of Commerce's discreti on to expand that list of documents of approval for 
specific goods or for specific time periods, through the issuance of a new "Catalogue of goods subject 
to export licensing"?  The European Union woul d welcome China's explanations on these points. 
15. The third point that we would like to discuss is the discretion enjoyed by the Chinese export 
license issuing agencies in accepting or refusing to gr ant an export license.  Ch ina asserts that Chinese 
law imposes on the licensing issuing ag encies the obligation to perform a simple procedural review of 
the application materials.  But, is this review really only procedural? 
16. China accepts in paragraph 786 of its first wr itten submission that the export license issuing 
agencies have the discretion to reject applicants  that do not posses "business qualifications". The 
European Union had suggested a translation of that  term as "management qualifications", but is happy 
to accept for purposes of our discussion toda y the translation offered by China. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-8 
  
  17. China, in paragraphs 786 and 820, asserts that the only thing an applicant must do in order to 
satisfy the requirement for a showing of "business qualification" is to provide its business license 
and/or the document proving that it is authorised to perform import-export activities.  Nothing else 
and nothing more.   
18. The European Union has not seen an offici al statement from the competent Chinese 
authorities, publicly acknowledging that this is the interpretation to be given to the requirement for a 
showing of "business qualifications", or "managemen t qualifications", or however China wishes to 
translate that term.  If such a statement is made and incorporated into the report of the Panel, the 
European Union would be prepared to take it into consideration in good faith and in an effort to 
resolve the dispute. 
B. C
HINA 'S ASSERTION IN FOOTNOTE 1111  OF ITS WRITTEN SUBMISSION  
19. Another small point which we wish to clarify is  China's statement in footnote 1111 of its first 
written submission.  There, China states that the Eu ropean Union has acknowledged in its first written 
submission the "fact" that "export licenses for all produc ts at issue in this dispute have always been 
granted and within three days". 
20. China's statement is evidently not correct.  The European Union has never acknowledged and 
does not acknowledge today that China has al ways granted all requested export licenses. 
21. China bases its statement on paragraph 162 of the European Union's first written submission.  
A simple read of that paragraph shows that the Eu ropean Union is describing the provisions of China's 
Measures for the Administration of Export Licenses, wh ich provide the time generally required for the 
issuance of an export license.  There is no refere nce to the actual practice followed by the Chinese 
export license issuing authorities and no reference to their having always granted all requested export 
licenses. 
II. CHINA'S ASSERTIONS IN RELATION TO ITS EXPORT QUOTAS 
A. THE SITUATION WITH ZINC ORES  
22. We now turn to China's assertions in relation to its export quotas.  A first, small point of fact 
which we wish to clarify is the situation with Zinc  ores and concentrates.  China states in paragraphs 
559, 641 and 740 of its first written submission that it  has not "made effective" that export quota in 
2010, or that "MofCom has not authorized for 2010 any quota for zinc".   
23. The European Union would be grateful if China could explain the meaning of these 
statements.  What does it mean not to have "made effective" an export quota?  Does it mean that the 
exportation of the good is free and without restric tions?  Or, does it mean that China acknowledges 
that it has imposed an export ba n on Zinc ores and concentrates? 
24. The European Union has raised  a claim under Article X:1 of the GATT, because China has 
not published the export quota for Zinc ores and conc entrates.  China responds that it has not "omitted 
to publish the quota for zinc", because there is no quota for Zinc. The EU welcomes clarification from 
China regarding whether China has imposed an  export ban on zinc ores and concentrates.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-9 
  
  B. C
HINA 'S CLAIMS IN PARAGRAPHS 346 TO 349 OF ITS WRITTEN SUBMISSION  
25. A more interesting point is raised by China' s assertion that the European Union has not 
identified the Chinese measures which impose th e export quotas (in paragraphs 346 to 349). 
26. These assertions of China are probably the resu lt of a misunderstanding. The European Union 
has provided in the Facts section of its first writte n submission a number of references to the Chinese 
laws, regulations, decisions, noti ces and announcements that subject the relevant Raw Materials to 
export quotas and regulate the administration, mana gement and allocation of these export quotas. 
27. The European Union's first written submission presents the facts relating to China's export 
quotas in 3 sections: first a general overview of th e Chinese rules on the management of export quotas 
(in paragraphs 62 to 70), then a presentation of the Chinese rules for the management of the export 
quotas allocated directly (in paragraphs 71 to 90) and finally a presentation of the Chinese rules for 
the management of the export quotas allocated through bidding (in paragraphs 91 to 115).  
Throughout these sections there are numerous refere nces to specific provisions of China's Foreign 
Trade Law; Regulation on the Administration of the Import and Export of goods; Measures for the 
Administration of Export Quotas; Measures on e xport quota bidding; and Implementation rules on 
export quota bidding. As mentioned in paragraph 19 9, the European Union challenges the consistence 
of all these provisions with the WTO Agreements. 
28. But this is not all.  The European Union's first written submission contains subsections for 
each Raw Material subject to an export quota.  In each such subsection, there are references to the 
various Chinese Notices, Announcements and Comm unications through which the export quota is 
imposed and managed for each Raw Material. We sh all spare the Panel and the parties and third 
parties from the torture of a recitation of all th e footnotes in the European Union's first written 
submission and the numbers and titles of the corres ponding Chinese legal provisions.  A simple read 
of the relevant parts of the Facts section of the submission shows that the measures at issue in this 
dispute are clearly identified. Again, as mentione d in paragraph 199, the European Union challenges 
the consistency of all these provisions with the WTO Agreements. 
29. However, if China considers that it has issued  even more measures imposing export quotas on 
the Raw Materials, which the Euro pean Union has not mentioned in its submission, we would be 
happy if China could provide the Panel with a complete  list.  This list would be useful for the Panel's 
analysis of China's compliance with Article X:1 of the GATT. 
C. THE SITUATION WITH COKE 
30. Finally, a clarification is required on the facts relating to the Coke export quota.  The 
European Union would like to thank China for clarif ying the fact that it does not apply to Coke the 
general Measures for the Administration of Expo rt Quotas (in paragraphs 737 and 738).  The 
European Union would be grateful if China could provide copies of the provisions of Chinese law that 
govern the procedure for the determination of the total quantity of the Coke export quota. 
31. China states that it does not determine the total amount of the Coke export quotas, before it 
invites interested enterprises to submit their application for an export quota.  China states that it does 
not publish the total amount of Co ke export quota before such inv itation, because there is no total 
amount of Coke export quota to be published. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-10 
  
  32. China has not provided copies of its legal provisions, or official statements from its competent 
authorities confirming the facts as described in its first written submission.  If China provides such 
documentation, the European Union would be prepared to take it into consideration. 
33. On a different point, the European Union notes that China raised an objection against that 
claim in paragraphs 31 to 35 of its written submission.  China asserts  that the European Union "did 
not include any statement in its Panel Request that  could serve to identify the alleged omission to 
publish the amount for the export quota for Coke". 
34. The European Union considers that these statem ents of China are probably the result of a 
misunderstanding. The European Union invites Chin a to read the first paragraph of the European 
Union's Panel Request, where it is clearly stated  that China "does not publish certain measures 
pertaining to the requirements, restrictions or prohib itions on exports". We consider that this language 
sufficiently shows that the European Union was raising a claim of non-publication of measures.  The specific mention of zinc in the fourth paragraph of the Panel Request, for illustrative purposes, cannot 
be interpreted as an exclusion of all the other goods  that are the subject of the current proceedings. 
III. CONCLUSION 
35. Mr. Chairman, members of the Panel, the Europ ean Union thanks you for your attention and 
patience. 
  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-11 
  
  ANNEX B-3 
 
CLOSING ORAL STATEMENT OF THE EUROPEAN UNION  
AT THE FIRST SUBSTANTIVE MEETING 
  
1. The European Union would like to thank th e Panel and the WTO Secretariat for the 
opportunity to put its views forward in this di spute and to have a good discussion which we have 
enjoyed. 
2. Further to agreeing with and supporting the views expressed by the United States of America 
in their closing statement, th e European Union would like to make some brief comments on two 
points. 
3. The first point relates to Article 6.2 of the DSU. The underlying theme or leitmotiv of this 
Article is to guarantee procedural fairness. This  means in essence that the defendant should get a 
reasonable notice in the Panel Request about the clai ms in the dispute in order to allow for a proper 
preparation of the case. It became very clear that  China did not suffer any prejudice in this case and 
was perfectly able to prepare its case properly. In the past, both the Appellate Body and Panels have 
been very generous and not thrown out claims in  the absence of prejudice. The European Union thus 
urges this Panel to follow past practice and not to th row out any claims made in this dispute, as there 
has been no prejudice caused to the respondent in this case.  
4. The second point that the European Union would li ke to make is to repeat the importance and 
systemic implications which is the subject of Questi on 8 in the set of questions put by the Panel to the 
parties in this dispute today. 
5. The European Union cautions against an ex tended application of exceptions in the 
GATT 1994, specifically those found in Article XX of the GATT 1994, to non-GATT obligations. 
This will open the door to an ex tremely slippery slope. Thank you. 
 
 
 WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-12 
  
 ANNEX B-4 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF  
THE EUROPEAN UNION 
 
I. GENERAL ISSUES 
1. China has acknowledged the WTO inconsiste ncy of its export quotas on zinc ores and 
concentrates and most forms of bauxite, as well as  of its export duties on manganese ores and silicon 
metal.  China asserts that it has not imposed expor t quotas on fluorspar and export duties on bauxite 
and yellow phosphorus in 2010.  The European Unio n considers that the Panel should make findings 
and issue recommendations on the WTO inconsistenc y of the export restrictions imposed on these 
goods too. 
2. In addition, the European Union considers th at the Panel should not exercise judicial 
economy on the claims based on China's Accession Protocol. 
II. THE EUROPEAN UNION HAS ESTABLISHED PRIMA FACIE  ALL ITS CLAIMS 
A. E
XPORT QUOTAS  
3. Both objections raised by China against the European Union's claims on export quotas should 
be rejected.  First, the European Union has pr operly identified in its first written submission the 
challenged export quotas and the Chinese legislative instruments which evidence the existence of the 
challenged export quotas.  Second, Article XI:2(a) of the GATT is an affirmative defence, which 
China (and not the European Union) must invoke and establish. 
B. EXPORT LICENSING  
4. As a matter of fact, China's export licenses are non-automatic and discretionary.  The export 
licenses are non-automatic because they are based on  Article 19 and not on Article 15 of China's 
Foreign Trade Law.  They are also discretionary, because of the provisions of Article 11(7) of the 
Measures for the administration of export licenses  and Article 5(5) of the Working rules on issuing 
export licenses .  A detailed analysis of the relevant Ch inese legal provisions supports the European 
Union's arguments. 
5. China's export licenses are incompatible with GA TT Article XI and the provisions of China's 
Accession Protocol, because they are non-automatic and discretionary. The existence of that 
discretion is by itself  the quantitative restriction, because it produces additional transaction costs and 
uncertainties that hinder trade.  Therefore, there is  no need to show that China has actually exercised 
the discretion. 
6. In addition, China's failure to publish the defi nition and list of the documents provided for in 
Article 5(5) of the Working Rules  and of the documents provided for in Article 11(7) of the Measures  
is inconsistent with Article X:1 of the GATT.  
7. China's administration of its export licensing system  is not consistent with Article X:3(a) of 
the GATT.  First, the identified Chinese legislativ e instruments are administrative in nature and, 
therefore, can be challenged under Article X:3(a).    WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-13 
  
 8. Second, the identified provisions create the possibility  and the danger  of an administration 
that is not uniform, impartial and reasonable.  In accordance with the report of the panel in Argentina 
– Hides , an inherent possibility , or danger  of a prejudice to some traders that might  create a negative 
impact on traders is sufficient to establish prima facie  a violation of Article X:3(a) of the GATT.  This 
possibility and risk result from the absence of any definition of the conditions on the basis of which 
MOFCOM may require additional materials, or may issue special documents of approval in 
administering China's export licenses. This creates the inherent danger  that different "other materials" 
may be required and different other "documents of approval" may be issued in relation to applicants 
that otherwise are in the same situation. Such administration does not satisfy the requirement of 
uniformity.  The same set of facts result in an administration which does not satisfy the requirements of impartiality and reasonableness. 
C. A
DMINISTRATION OF EXPORT QUOTAS  
9. First, China's administration of its export quota a llocation system is inconsistent with China's 
Accession Protocol.  China continues to impose as a prerequisite for participating in export quota 
allocation procedures the achievement of certain "l evels of prior exports" and the existence of a 
certain "minimum registered share capital".  Chin a's Accession Protocol expressly provides that China 
must abolish these requirements.  In addition,  these requirements prevent foreign enterprises from 
participating in export quota allo cation procedures: no foreign enterprise was awarded an export quota 
in 2009. 
10. Second, China's administration of its system for the direct allocation of export quotas is 
inconsistent with Article X:3(a) of the GATT.  Ch ina's authorities can reject applicants for lack of 
"operation capacity".  This administration has been applied to Zinc ores and concentrates until 2005.  
However, the Panel should make findings on that admi nistration's consistency w ith Article X:3(a) of 
the GATT for a number of reasons. 
11. The Panel should also find that this administra tion is not consistent with Article X:3(a) 
GATT, because the notion of "operation capacity" has not been defined and, therefore, there is a 
danger that different export quota allocation author ities may apply it differently to applicants in 
identical situations.  Such administration does not meet the requirements of uniformity, impartiality and reasonableness in the sense of Article X:3(a) of the GATT. 
III. CHINA'S DEFENCES SHOULD BE REJECTED 
A. GATT
 ARTICLE XI:2( A) DEFENCE  
12. China's export quota on "refractory grade bauxite/high alumina clay" does not meet the 
conditions for the application of Article XI:2 (a) of  the GATT.  First, from a WTO law point of view, 
China's examples are irrelevant.  They do not consti tute subsequent practice of the signatories to an 
international agreement in the meaning of Article  31(3)(b) of the Vienna Convention.  Second, 
China's interpretation of the notion of "essential products" is too broad an d if accepted would render 
Article XX(j) of the GATT redundant. Third, China's in terpretation of the notion of "critical shortage" 
is too broad and if accepted would render Article  XX(g) of the GATT redundant.  For the purposes of 
Article XI:2(a), a shortage is "critical" when it can  be relieved or prevented through the application of 
temporary measures, pending the return to normal ma rket conditions.  The limited reserves of a good, 
by themselves, are not an element that can suppor t a finding of "critical shortage", because such 
shortages cannot be prevented or relieved throu gh temporary measures.  Likewise, there is no 
evidence that China's regulatory framework, or potential but unrealised risks of technological 
problems or social unrest, have created a "critical shortage" in the sense of Article XI:2(a) of the WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-14 
  
 GATT.  Fourth, China's measures are not "temporaril y applied" and cannot "p revent or relieve" the 
"critical shortage".  They cannot "prevent or re lieve" the critical shortage from occurring, because 
they cannot stop the exhaustion of the reserves. 
B. GATT
 ARTICLE XX DEFENCE  
1. GATT Article XX cannot be invoked for violations under paragraph 11.3 Accession 
Protocol 
13. China cannot justify violations of its obliga tions under paragraph 11.3 of its Accession 
Protocol by invoking Article XX GATT, because the de fence is only available for GATT violations or 
if it has been incorporated by re ference in the constituent part of another agreement. Contrary to 
paragraph 5.1, paragraph 11.3 of China's Accession Protocol does not contain such a reference but has 
its own exception clause in Annex 6 of the Acce ssion Protocol instead. Also, paragraph 170 of the 
Working Party Report neither explicitly nor implicitly  refers to any GATT exceptions or flexibilities. 
The fact that Article XX GATT cannot serve as a ju stification for violations outside GATT has most 
recently been confirmed by the Panel in US – Poultry (China) . 
2. China's export duties and quotas are not ju stified by Article XX(g) of the GATT 
14. The European Union maintains that China has not demonstrated that its export duties on 
fluorspar and its export quotas on bauxite satisfy  the criteria of Article XX(g) of the GATT. 
15. In relation to its export duties on fluorspar, Chin a has not shown, firstly, that its measures 
were related to  the conservation of natural resources; secondly, that they form part of a 
comprehensive set of measures relating to the conservation  of fluorspar; and, finally, that they were 
made effective in conjunction  with restrictions on domestic  production or consumption  as envisaged 
by Article XX(g) of the GATT.  
16. In the opinion of the European Union, the e xport duties that China maintains on fluorspar do 
not satisfy the "relating to" requirement envisaged  in the text of Article XX(g) of the GATT. 
Moreover, the Notice Regarding the 2009 Ta riff Implementation Program  which imposes the export 
duties on fluorspar does not contain any evident cau sal link to the objective of the conservation of 
"exhaustible natural resources".  
17. The European Union also maintains that the ch allenged export duties on fluorspar do not form 
part of a " comprehensive set of measures relating to the conservation of fluorspar ", and that China's 
export duties are not made effective in conjunction  with restrictions on domestic production or 
consumption. The only measures which specifically rela te to fluorspar in the list of thirteen measures 
which China considers to " manage the supply, production and use ” of fluorspar, came into being only 
after this Panel was established. Also, China's interpretation of " even-handedness"  (i.e. treatment of 
domestic and foreign users of the raw materials in an " even-handed " manner) is not in line with the 
interpretation of this term by the Appellate Body in US – Gasoline  and US – Shrimp . 
18. Consequently, the European Union maintains th at China has not established that the export 
duties it imposes on fluorspar satisfy the requirements of Article XX(g) of the GATT. 
19. In relation to the export quota on bauxite, China fails to establish, firstly, that its measures 
relate in any way to the conservati on of exhaustible resources; and, secondly, that they  form part of a 
comprehensive set of measures relating to the conservation  of bauxite; and, finally, that they are taken 
in conjunction with restrictions on domestic production and consumption.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-15 
  
 20. Firstly, the specific Chinese measure which sets the export quotas for bauxite in 2009, that is 
the "Ministry of Commerce Announcement Regard ing 2009 Agricultural and Industrial Products 
Export Quota Amounts (Announcement No. 83 of 2 008)" merely announces the fact that the 2009 
quota figures for agricultural and industrial product e xports have been released, and that MOFCOM 
will accept applications for these quotas. There is no reference made, directly or indirectly, that the 
quotas imposed on bauxite relate in any way to the objective of conservation of a natural resource. 
21. Secondly, the European Union maintains that most of the thirteen measures which China 
presents as its " conservation policy for refractory-grade  bauxite " are of a general regulatory or fiscal 
character having no link to the expor t quotas that China imposes on bauxite. 
22. Thirdly, some measures which China considers as forming part of its " conservation policy for 
refractory-grade  bauxite " were enacted after this Panel's es tablishment. In the opinion of the 
European Union, China's export quotas on bauxite are not " made effective in conjunction with 
restrictions on domestic pr oduction or consumption ", and thus do not satisfy the requirements of 
Article XX(g) of the GATT. 
3. Export duties and quotas are not justified by Article XX(b) 
23. In the opinion of the European Union, China' s export duties on zinc scrap, magnesium metal 
scrap and manganese metal scrap, its export duties on coke, magnesium metal and manganese metal, 
and its export quotas on coke and s ilicon carbide cannot be justif ied under Article XX(b) of the 
GATT. Firstly, these restrictions do not meet the " necessity " test as established by panels and the 
Appellate Body in relation to Article XX(b) of th e GATT, as they make no "material contribution" 
nor are they " apt to make a material contribution to the protection of human, animal or plant life or health". The European Union also maintains that  there are reasonably available WTO-consistent 
alternative measures that China coul d have taken to protect health. 
24. With regard to export duties on zinc scrap,  magnesium metal scrap and manganese metal 
scrap, there is no evidence that Ch ina's objective for the imposition of the export duties was really that 
of reducing health risks which are associated w ith pollution. In particular, the asserted policy to 
increase secondary production through a "tax" on scrap cannot support or even make a "material 
contribution" towards China's supposed health objective. 
25. Likewise, the European Union maintains that the export duties on coke, magnesium metal and 
manganese metal do not result in a decrease in the production of these raw materials and, on that 
basis, any reductions in pollution associated with  their production, as China argues. Thus these 
measures are not "necessary" within the meaning of Article XX(b) of the GATT. 
26. The European Union also submits that Chin a's export quotas on coke and silicon carbide are 
not " necessary"  to protect human, animal, plant life or hea lth within the meaning of Article XX(b) of 
the GATT. The European Union challenges China' s assertions that the export quotas on coke and 
silicon carbide " make a material contribution ", or " are apt to make a material contribution " to the 
objective of health protection in China. It is also of the opinion that they are not based on any hard 
evidence, but merely on economic hypoth esis which can be easily disproven. 
4. Export duties and quotas do not satisfy the criteria of the chapeau  of Article XX GATT 
27. Finally, in the opinion of the European Uni on, China has not established that it meets the 
criteria for any of the elements of the chapeau  and, thus it believes that China has failed to meet its 
burden under the chapeau  of Article XX of the GATT. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-16 
  
  ANNEX B-5 
 
EXECUTIVE SUMMARY OF THE OPENING AND CLOSING ORAL STATEMENTS OF 
THE EUROPEAN UNION AT THE SECOND SUBSTANTIVE MEETING 
  
I. GENERAL POINTS RAISED BY CHIN A'S SECOND WRITTEN SUBMISSION 
A. "A
BANDONED CLAIMS " 
1. The fact that a complaining party does not repeat a claim at a particular stage of the 
proceedings does not mean that the party has withdrawn that claim ( EC - Selected Customs Matters , 
para. 7.42). 
B. THE BURDEN OF ESTABLISHING THE CONDITIONS OF ARTICLE XI:2( A) 
2. China bears the burden of establishing the conditio ns of Article XI:2(a). In the past the 
Appellate Body and the panels ha ve never required that a complainant needed to plead and prove 
Article XI:2(a) nor considered that e.g. XI:2(b) and XI:2(c) must be invoked and proven by the 
complaining party in order to establish a prima facie  violation of Article XI:1 GATT. It is up to the 
defendant to plead and prove Article XI:2(a) GATT, if he so wishes. 
C. THE IRRELEVANCE OF THE BOP-U NDERSTANDING FOR THE INTERPRETATION OF 
ARTICLE  XI:2( A) GATT 
3. The important difference in the scope of the Understanding  and Article XI:2(a) is that 
Article XI:2(a) allows the imposition of trade restrictions, while Articles XII:3 and XVIII:10 GATT 
together with the Understanding  allow the  removal  of trade restrictions. Therefore, the Understanding  
and Article XI:2(a) pursue opposing objectives. A broader definition of "essential products" in 
Article XI:2(a) leads to more restriction on trade, a broader definition of "essential products" in the 
Understanding  leads to fewer  restrictions on trade. Consequently, a potential common definition of 
"essential products" would lead to an in coherent application of the GATT. 
D. THE IRRELEVANCE OF ARTICLE XXXVI:5  GATT  FOR THE INTERPRETATION OF 
ARTICLE  XI:2( A) GATT 
4. The European Union (EU) does not express any view on whether China qualifies as a 
developing country. The use of Article XXXVI:5 as relevant context for the interpretation of 
Article XI would create a systemic problem: Article XI applies to all WTO Members, whereas 
Article XXXVI:5 relates only to developing countries. If Article XXXVI:5 could serve as "relevant 
context" for the interpretation of Article XI, this would lead to a different level of obligations under 
Article XI GATT depending on the classification of the Member in question. China cannot rely on a 1989 GATT Secretariat note circulated during the Uruguay Round Negotiations in the light of note 
TN/CTD/W/33 circulated on June 8, 2010.     
E. T
HE PROPER INTERPRETATION OF ARTICLE X:3( A) GATT 
5. The EU challenges China's "administration" of  its export quota allocation system and export 
licensing system, i.e., the application by China of its relevant laws and re gulations. E.g., the EU 
challenges the broad and unfettered discretion enjoye d by China's authorities in interpreting the notion 
of "operating capacity", when they select the enterp rises that will be directly allocated an export  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-17 
  
  quota. The Appellate Body in EC – Selected Customs Matters  does not require a complaining party to 
show that the elements of the de fending party's "administration of la ws" and regulations, such as those 
identified by the EU, must " necessarily " lead to an administration which is non-uniform, partial or 
unreasonable, in order to establish a violation of Article X:3(a) of the GATT. 
II. CHINA'S GATT ARTICLE XX DEFENCES 
A. A
PPLICABILITY OF THE ARTICLE XX GATT  EXCEPTIONS TO PARAGRAPH 11.3  ACCESSION 
PROTOCOL  
6. Paragraph 11.3 of China's Accession Protocol does not contain any direct or indirect 
incorporation of Article XX GATT, therefore viola tions by China of its obligations pursuant to 
paragraph 11 of the Accession Pr otocol cannot be justified by recourse to Article XX GATT. 
B. CHINA 'S DEFENCE UNDER ARTICLE XX( G) 
7. Export restraints are not " part and parcel " of China's other measures which limit the supply 
of bauxite and fluorspar. The me asures imposing the export duties on fluorspar and the quotas on 
refractory-grade bauxite, do not " relate to"  conservation. The meaning of the phrase " relating to", has 
been interpreted by the Appellate Body as meaning that a measure must be " primarily aimed at"  the 
conservation of exhaustible natural resources in or der to fall within the scope of Article XX(g). 
China's measures imposing export restrictions on fluorspar and bauxite are not targeted or " primarily 
aimed at " the goal of conservation of natural resources. 
8. References to the Preamble of the WTO Agreement,  the principle of sustainable development, 
as well as to other references and statements made  in various international environmental fora, 
declarations or agreements have no relevance to the issue of whether the disputed measures satisfy the 
criteria established by Article XX(g) GATT. Chinese export restrictions were not made " in 
conjunction with"  domestic restrictions on extraction or production. The " timing"  of the domestic 
restrictions makes it obvious that the exclusive motiv ation has always been to pursue certain industrial 
policy objectives. China's " conservation policies " are made up of a number of unconnected measures, 
taken over a number of years, the majority of whic h do not even make a reference to fluorspar or 
bauxite. The only measures specifically referring to fluorspar and bauxite are the 2010 domestic 
restrictions on the mining and processing of fluorspar and " refractory-grade bauxite ", introduced well 
after the establishment of this panel. 
9. The EU's interpretation of the "even-hande dness" requirement genuinely reflects the 
Appellate Body's interpretation in US - Gasoline . 
10. China is not presenting any evidence on the quan titative effects of its measures on export and 
domestic consumption, which would allow an assessment of "even-handedness". The export duty on 
fluorspar constitutes an extra burden, as no export  duty is paid by fluorspar users in China. 
Article XXXVI:5 and its Ad Note have no rele vance to the correct interpretation of GATT 
Article XX(g).  
C. CHINA 'S DEFENCE UNDER ARTICLE XX( B) 
11. The different environmental protection laws a nd regulations listed by China do not form a 
"comprehensive environmental protection framework" and have no causal link with, or relevance to, 
the export duties and quotas. They are made-up of post-hoc  "environmental defences". WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page B-18 
  
  12. Statistics prove that production of the raw mate rials at issue in China has actually increased 
over the last five years. China is basing its (" but-for ") defence on economic th eories, developed or 
adjusted for this dispute which are flawed in ma ny ways. China's whole case rests on the attempt to 
convince the Panel that because some economic studies say so, the export duties and quotas imposed 
do actually make (or "are apt to make") a "mater ial contribution" towards China's goal of health 
protection - and that therefore they are "necessary" within the meaning of GATT Article XX(b). It remains unclear why actual data from the years in wh ich China's export restrictions were already in 
place was completely ignored for the studies presented. The European Commission document cited by 
China actually states that " scrap recovery for manganese was negligible".  The 12-25% range quoted 
is in reality the percentage content of ma nganese found in "old scrap" of steel slag.  
D. R
EASONABLY AVAILABLE ALTERNATIVES  
13. The alternatives proposed by the co-complainant s do not carry any of the risks mentioned in 
Brazil – Retreaded Tyres . There are more effective ways in which China can achieve its desired goal 
of protection of animal or plant life or hea lth. The pollutants emitted from the processing of raw 
materials do not differentiate between raw materi als intended for export or for domestic use. 
E. THE REQUIREMENTS OF THE CHAPEAU OF GATT  ARTICLE XX ARE NOT MET BY CHINA  
14. The requirements of the Article XX chapeau  must not be confused with those of 
Article XXXVI:5 of the GATT, with the customar y norm of sovereignty over natural resources or 
with China's position as a " developing country"  and "long-term economic growth" aims. China has 
failed to demonstrate that it meets the requirements of the chapeau  and of sub-articles (b) and (g) of 
GATT Article XX. 
III. CLOSING STATEMENT AND CONCLUSION  
A. POINTS OF FACT  
15. Several points of fact raised by China over the course of the hearing required further 
comment: The administration of China's export quota allocation system for zinc ores and concentrates 
until 2006 involved the application of the "operating capacity" criterion (para. 329 opening statement).  Through this admission, China in essen ce acknowledges that it administered its laws and 
regulations as challenged by the EU under X:3(a) GATT. In EC-Biotech  the panel confirmed that 
panels have the authority to make  findings relating to measures expired even before the establishment 
of the panel (para. 7.1306). Contrary to China's st atement (para. 339 opening statement) exhibit JE-82 
lists the "foreign-invested enterprises" that receive d a coke quota in 2009. They are not "foreign 
companies", in the sense of paragraph 5.2 of the Accession Protocol and para graphs 84(a) and 84(b) 
of the Working Party Report. Thus, no foreign company or individual has been allocated a Raw Material export quota. Further documents (para. 346 opening statement) in connection with a note to 
Appendix 1 of the 2010 Catalogue of goods subject to export licen ces call upon the panel to make the 
requested findings. 
B. C
HINA 'S LEGAL INTERPRETATIONS  
16. Regarding the legal interpretation presented by China over the course of the hearing it has to 
be clarified that the terms of Article XI:2(a) GAT T must not be interpreted in a manner that would 
diminish the fundamental principles of Article XI:1 to nullity. An exception cannot be applied as to "frustrate or defeat" the basic rights and obligati ons set out in the substantive rules of the GATT ( US - 
Gasoline , WT/DS2/AB/R, p. 22). The SPS Agreement is  not relevant for the interpretation of  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page B-19 
  
  Article XI:2(a) GATT. Important differences between the texts of the SPS Agreement and 
Article XI:2(a) make it impossible to transpose prin ciples of the former to the interpretation of the 
latter. 
17. The EU did not state, as China alleged, that other WTO Members have a right to a share of 
China's natural resources. According to Article XX(g) GATT non-Chinese users have a right to be 
treated in an equitable, fair  or even-handed manner when trading  with China in these raw materials. 
Finally, regarding the "necessity" standard requi red by the Appellate Body under Article XX(b) 
GATT China has failed to prove that the export rest rictions it has imposed have made a material 
contribution to the alleged decline of polluti on levels resulting from EPR production (para. 277 
opening statement). 
18. The leitmotiv  which could be drawn from China's rep lies to the Panel questions was that it 
gave unspecific, speculative, even random- sounding answers to the questions raised. 
 
 
_______________ 
 
   WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page C-1 
  
  ANNEX C 
 
SUBMISSIONS OF MEXICO 
 
CONTENTS PAGE 
C-1 Executive Summary of the first 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/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page C-2 
  
  ANNEX C-1 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF MEXICO 
 
 
I. INTRODUCTION 
1. Despite China's commitments to limit or elim inate the use of export restraints during the 
course of its negotiations to accede to the WTO, Chin a's export restraints have proliferated in number 
and kind. China now subjects over 600 items to non- automatic licensing and over 350 items to export 
duties.  These export restraints have become incr easingly restrictive over time; export quota amounts 
have decreased while export duty rates have increased. 
2. The products subject to the export restraints at  issue in this dispute are various forms of 
bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, 
and zinc (together the "Raw Materials"). At issue in this dispute are four types of restraints that China 
imposes on the exportation of the Raw Materials: (1) export duties; (2) export quotas; (3) export 
licensing; and (4) minimum export price requirements. Each type of export restraint, including in 
some cases its administration, is inconsis tent with China's ob ligations under the General Agreement 
on Tariffs and Trade 1994 ("GATT 1994") and China's Protocol of Accession to the WTO 
("Accession Protocol"), which incorporates commitm ents made by China in the Report of the 
Working Party on China's Accession to th e WTO ("Working Party Report").   
II. FACTUAL BACKGROUND 
A. C
HINA 'S POLICIES FOR DEVELOPING AND PROMOTING ITS DOMESTIC INDUSTRY RELY ON 
RESTRAINING THE EXPORTATION OF RAW MATERIALS  
3. China's economic development is guided and directed by various plans and policies 
formulated and issued by the central government, including the Five Year Plans for National 
Economic and Social Development . Over the period of the tenth and eleventh Five-Year Plans, 
spanning the years 2001 to the present, China has achieved remarkable progress in its industrial 
growth and development. This growth, however, co mes at the expense of the rest of the world. 
China's production of industrial raw materials and processed goods has increased dramatically. 
China's exports of processed, value-added goods ha ve also increased. However, China's exports of 
industrial raw materials have decreased. 
4. These trends are the result of a deliberate strategy that China employs to optimize the 
conditions for realizing its econo mic and industrial ambitions. China's industrial strategy is to 
leverage and exploit the differences  in the international and domes tic markets for raw materials and 
downstream, processed products, using restraints on e xports as the linchpin. The export restraints that 
China imposes on the Raw Materials are part of th is industrial policy, which is predicated on 
advantaging China's domestic producers and indust ries, but distorts the international economic 
marketplace and is inconsistent with China's WTO obligations.  
B. THE RAW MATERIALS  
5. The nine industrial raw materials subject to the various export restraints imposed by China – 
bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, 
and zinc – are either naturally occurring minerals  or materials that have  undergone some initial 
processing. China is a leading global producer of all nine of these raw materials, which renders  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page C-3 
  
  China's restraints on their exportation particular ly distortive for non-Chinese consumers of these raw 
materials and of the products manufactured from them. 
C. E
XPORT DUTIES  
6. China's obligations under paragraph 11.3 of Pa rt I of the Accession Protocol require that 
China not impose export duties on products that are not listed in Annex 6 of the Accession Protocol. These obligations also require China to limit any export duties imposed on products that are listed in 
Annex 6 to the rates provided therein.   
7. However, China imposes export duties on va rious forms of bauxite, coke, fluorspar, 
magnesium, manganese, silicon metal, and zinc
1, even though none of these materials is listed in 
Annex 6. In addition, China also imposes export duties on yellow phosphorus (which is listed in 
Annex 6) at a rate that exceeds the maximum rate provided in Annex 6. 
D. NON-AUTOMATIC EXPORT LICENSING FRAMEWORK  
8. China restricts the exportation of various fo rms of bauxite, coke, fluorspar, manganese, 
silicon carbide, and zinc by subjecting thei r exportation to non-automatic export licensing.2  
MOFCOM, together with Custom s, formulates, adjusts, and publishes a catalog listing all goods 
whose exportation is designated for restriction. Exportation of such goods requires approval by 
MOFCOM and is subject to export licensing that is, accordingly, not automatic.   
9. Non-automatic export licensing (all referenc es to "export licensing" hereinafter mean 
non-automatic export licensing) is the framework through which China imposes and administers the 
export quotas for bauxite, coke, fl uorspar, silicon carbide, and certain forms of zinc, as discussed 
below. For these products, the non-automatic export licensing requirements function as a restriction 
on exportation additional to the restriction effected  by the export quotas. Manganese and certain forms 
of zinc are subject to non-automatic licensing, but not quotas.  
E. EXPORT QUOTAS  
10. China restricts the exportation of various forms of bauxite, coke, fluorspar, silicon carbide, 
and zinc by subjecting the exportation of th ese materials to export quotas or prohibitions.3  C h i n a  
maintains two systems for allocating export quotas: direct allocation or a quota bidding system.  The export quotas on coke and zinc are allocated "direc tly".  The export quotas on bauxite, fluorspar, and 
silicon carbide are allocated through a bidding system. 
11. MOFCOM is responsible for setting the total amount of export quotas of the following year 
no later than October 31 of each year, distributing export quotas, evaluating applications for export 
quotas, determining whether to grant quotas, and in collaboration with Customs, is responsible for 
formulating, adjusting, and publishing a catalog lis ting all goods subject to export quota.  MOFCOM 
                                                      
1 For purposes of the discussion of China's export duties, the terms "bauxite ", "coke", "fluorspar", 
"magnesium", "manganese", "silicon metal", "yellow phosp horus", and "zinc" cover the forms of each of these 
Raw Materials listed in Chart of Raw Materials Subject to Export Duties (Exhibit JE-5). 
2 For purposes of the discussion of China's non-automatic export licensing, the terms "bauxite", "coke", 
"fluorspar", "manganese", "silicon carbi de", and "zinc" cover the forms of each of these Raw Materials listed in 
Chart of Raw Materials Subject to Export  Licensing and Quotas (Exhibit JE-6). 
3 For purposes of the discussion of China's export quotas, the terms "bauxite ", "coke", "fluorspar", 
"silicon carbide", and "zinc" cover the forms of each of these Raw Materials listed in Chart of Raw Materials 
Subject to Export Licensing and Quotas (Exhibit JE-6). WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page C-4 
  
  must approve the exportation of the goods listed in the catalog as subject to quota before they can be 
exported.  Entities that are approved to export under the quotas are issued a certificate of quota.  Only after an exporter obtains a certificate of quota can that exporter export the relevant products.   
12. While China publishes the annual quota amounts for most products subject to quota, China 
did not publish the annual quota amount for coke. China instead publishes notices during the year 
announcing that MOFCOM is distribut ing the export quota on coke to specific enterprises.  China has 
not published any quota amount in relation to the export quota on zinc in 2009. 
13. Coke Export Quota Application Process. China requires enterprises to apply to receive an 
allocation of coke under the export quota for a given y ear in October of the previous year. As part of 
that application process, China requires enterprises to sa tisfy certain criteria in order to be eligible to 
receive an allocation under the quota. Those criteria include having exported a certain amount of coke 
in previous years, and in the case of certain ente rprises, having a certain minimum registered capital.  
Applicant enterprises who do not satisfy the requis ite criteria are not permitted to export coke under 
the quota.  China also requires enterprises applying  to export coke under the quota to submit a number 
of documents including prior export invoices.  
14. China empowers the CCCMC with responsibility for reviewing and evaluating the 
applications of enterprises seeking to export coke  under the quota. Ulti mately, MOFCOM publishes 
the list of all companies that satisfy the eligib ility criteria on the basis of the CCCMC's advice. 
15. In addition, MOFCOM administers different application processes for Chinese enterprises 
and foreign-invested enterprises. While the 200 9 application procedures for foreign-invested 
enterprises do not appear to be published, the measures allocating portions of the quotas to foreign-
invested enterprises in 2009 make clear that such  enterprises are subject to an application and 
approval process for the coke export quota.  
16. Zinc. While China also imposes export quotas on zinc, China has not published any measures 
in 2009 announcing the quantities of zinc that may be exported under the quota or any measures 
setting forth application procedures for ente rprises seeking to export under the quota.  
17. Export Quota Bidding. China allocates the export quotas on bauxite, fluorspar, and silicon 
carbide through a bidding process. Enterprises seeking to export the materials subject to the bidding 
procedure are required to satisfy certain eligibility criteria in order to participate in the bidding 
process including criteria relating to minimum regi stered capital and prior export experience. The 
enterprises that satisfy such criteria and participat e in the bidding process must submit a bid price and 
bid quantity for the material they are seeking to export. China then awards portions of the quota beginning with the bidding enterprise that submits  the highest bid price. The enterprises that are 
awarded a portion of the quota must pay a "total award price" ( i.e., the enterprise's bid price 
multiplied by its bid quantity) in order to export.  
18. MOFCOM has established Bidding Offices composed of inter alia representatives of the 
CCCMC to administer aspects of the bidding pr ocess. The Bidding Office's – and therefore the 
CCCMC's – responsibilities include reviewing the app lications of bidding enterprises to determine 
whether they satisfy the requisite eligibility criteria.  Applicant en terprises are also required to submit 
certain documents including a balance sheet and income statement, and information including 
registered capital, net profit, and prior export volumes and values.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 Page C-5 
  
  F. E
XPORT LICENSING ADMINISTRATION AND REQUIREMENTS  
19. China controls and restricts the exportation of  bauxite, coke, fluorspa r, manganese, silicon 
carbide, and zinc through an export licensing system  that conditions the issu ance of licenses and the 
usage of those licenses in various ways.4   
20. There are three types of export licenses, which determine where and how many times a 
particular license can be declared and used. Licenses must be obtained from particular license issuing 
entities depending on the product being e xported and/or the type of exporter applicant.  Export license 
issuing entities review applications based on a vari ety of factors and documents including documents 
of approval issued by MOFCOM in addition to  the export contracts, exporter management 
qualifications, and other materials to  be submitted, none of which are further identified or defined in 
the Export Licensing Rules  or related licensing measures. Export licensing entities and individual staff 
members of such entities are subject to sanctions for violating the rules and regulations applicable to 
export license issuance. 
G. MINIMUM EXPORT PRICE REQUIREMENT  
21. China restrains the exportation of bauxite, coke, fluorspar, magnesium, silicon carbide, 
yellow phosphorus, and zinc by imposing a mi nimum price requirement on their exportation.5  China 
implements this restraint through a non-transparent system.  Based on statements made by China and 
documents submitted by Chinese exporters in US cour ts, it appears that export prices that are set by 
the CCCMC are observed by exporters through an o fficial "system of self-discipline" and further 
reinforced through the availability of penalties imposed by MOFCOM, and through China's licensing 
authorities and Customs. 
III. LEGAL DISCUSSION 
A. CHINA 'S EXPORT DUTIES ARE INCONSISTENT WITH CHINA 'S OBLIGATIONS UNDER PART I 
PARAGRAPH 11.3  OF THE ACCESSION PROTOCOL  
22. Paragraph 11.3 of the Accession Protocol contains a commitment by China to "eliminate all 
taxes and charges applied to exports" except in two specific situations: (1) where the taxes and 
charges are covered by Article VIII and applied cons istently with the requirements of Article VIII; 
and (2) where the taxes and charges are imposed on pr oducts listed in Annex 6 at  a rate less than or 
equal to the ad valorem  percentage specified for those products in Annex 6. 
23. China imposes "temporary" export duties at ad valorem rates ranging from 10 to 40 per cent 
on various forms of bauxite, coke, fluorspar, magn esium, manganese, silicon metal, and zinc. These 
duties are charges applied to exports that are term ed "export duties" in China's measures. The export 
duties resulting from the application of these duty rates are not applied "in conformity with the 
provisions of Article VIII of the GATT 1994" because export duties do not fall within the scope of that Article. Furthermore, none of the products on which these export duties are imposed is listed in 
Annex 6. Accordingly, China's maintenance of th ese temporary export duties is inconsistent with 
China's commitment under paragraph 11.3 of the Accession Protocol.  
                                                      
4 As set forth above, for purposes of the discussion of China's non-automatic export licensing, the terms 
"bauxite", "coke", "fluorspar", "manganese", "silicon carb ide", and "zinc" cover the forms of each of these Raw 
Materials listed in Chart of Raw Materials Subject to Export Licensing and Quotas (Exhibit JE-6). 
5 See Chart of Raw Materials Subject to Minimum Export Prices (Exhibit JE-7) for products subject to 
minimum export price requirements. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page C-6 
  
  24. China also imposes a "regular" ad valorem export duty at a rate of 20 per cent on yellow 
phosphorus. In addition to this re gular export duty, China imposes a "special" export duty rate for 
yellow phosphorus to 50 per cent, resulting in a total export duty rate of 70 per cent effective 
1 January 2009. The export duty resulting from the application of these duty rates to exports of yellow 
phosphorus is explicitly excluded from the cove rage of Article VIII of the GATT 1994. The 
maximum ad valorem  export duty rate permitted to be applie d to yellow phosphorus under Annex 6 is 
20 per cent. Accordingly, the export duty rate of 70%  applied to the exportati on of yellow phosphorus 
is inconsistent with China's commitment unde r paragraph 11.3 of the Accession Protocol. 
B. C
HINA 'S EXPORT QUOTAS ARE INCONSISTENT WITH CHINA 'S OBLIGATIONS UNDER 
ARTICLE  XI:1  OF THE GATT  1994 
25. Article XI:1 of the GATT 1994 explicitly prohib its Members from instituting or maintaining a 
restriction or prohibition made effective through a quota on the exportation of any product. However, 
China subjects the exportation of various forms of ba uxite, coke, fluorspar, s ilicon carbide, and zinc to 
quotas. These export quotas are therefore in breach of China's obligations under Article XI:1 of the 
GATT 1994. As China subjects the exportation of zinc to a quota, but does not publish any export quota for zinc, China effectively sets the export quota for zinc at zero.  As a result, China prohibits the exportation of zinc, in contraventi on of Article XI:1 of the GATT 1994. 
26. China's export quotas on bauxite, coke, fluorsp ar, silicon carbide, and zinc are also 
inconsistent with paragraphs 162 and 165 of the Working Party Re port, which contain enforceable 
commitments with respect to the elimination of export restrictions.   
C. C
HINA 'S ADMINISTRATION AND ALLOCATION OF ITS EXPORT QUOTAS IS INCONSISTENT WITH 
CHINA 'S OBLIGATIONS UNDER THE ACCESSION PROTOCOL , THE WORKING PARTY REPORT , 
AND THE GATT  1994 
27. Trading Rights . China's commitments under paragraph 5.1 of Part I of the Accession 
Protocol and paragraphs  83 and 84 of the Working Party Repor t (commonly referred to as China's 
"trading rights" commitments), require China to give  all foreign enterprises and individuals, as well as 
all enterprises in China, the right to export most  products.  Furthermore, China explicitly committed 
to eliminate its examination and approval system and to eliminate certain eligibility criteria for 
obtaining or maintaining the right to export including criteria relating to prior export experience and minimum registered capital. However, in its admini stration of the quotas for coke, which is directly 
allocated, and the quotas for bauxite, fluorspar, an d silicon carbide, which are allocated through a 
bidding process, China breaches these commitments by  impermissibly requiring exporters to satisfy 
certain criteria in order to be eligible to receive an allocation of the coke quota or participate in the 
quota bidding process.  
28. Partial and Unreasonable Administration . China's administration of its export quotas is also 
inconsistent with Article X:3(a) of the GATT 1994 , which requires Members to administer certain 
measures described in Article X:1 in a "uni form, impartial and reasonable manner."   
29. China empowers a private party B the CCCMC B to have direct involvement in the 
administration of the export quota on coke, which is allocated directly, an d the export quotas on 
bauxite, fluorspar, and silicon carbide, which are allocated through the bidding system. The CCCMC 
evaluates enterprises' applications to export unde r the quota and determines whether they satisfy the 
relevant eligibility criteria.  In that role, the CC CMC also obtains access to sensitive and confidential 
information, including past export invoices in th e case of the coke quota, and balance sheets and 
income statements in the case of the export quotas allocated through bidding. The involvement of the  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 Page C-7 
  
  CCCMC – an association of private commercial partic ipants in a common industry – renders China's 
administration of these export quotas partial and unreas onable in contravention with Article X:3(a) of 
the GATT 1994. 
30. Total Award Price . Article VIII:1(a) of the GATT 1994 prohibits "fees and charges of 
whatever character . . . imposed . . . on or in co nnection with exportation" where such fees are not 
"limited in amount to the approximate cost of services rendered...". Enterprises that are awarded a portion of the export quota for materials subject to  quota bidding are required to pay a total award 
price in order to export the materials. The total aw ard price therefore constitutes a "fee or charge of 
whatever character . . . imposed . . . in connectio n with . . . exportation" within the meaning of 
Article VIII:1(a). The total award price is also not  limited to the approximate cost of services 
rendered. Thus, the total award pri ce is inconsistent with China's ob ligations under Article VIII:1(a) 
of the GATT 1994. The total award price is also in consistent with paragraph 11.3 of the Accession 
Protocol as a "tax or charge" imposed on the exporta tion of products that are not listed in Annex 6. 
D. C
HINA 'S EXPORT LICENSING FOR PRODUCTS SUBJECT TO RESTRICTED EXPORTATION IS 
INCONSISTENT WITH CHINA 'S OBLIGATIONS UNDER ARTICLE XI:1  OF THE GATT  1994  AND 
PARAGRAPHS 162 AND 165 OF THE WORKING PARTY REPORT  
31. China uses licensing to subject the exportation of  designated products to restriction. China 
identifies such goods on a positive list of products  subject to export licensing published annually. The 
list that China published for 2009 includes various  forms of bauxite, coke, fluorspar, manganese, 
silicon carbide, and zinc, indicating that the exportati on of these products is designated by the state as 
restricted. Furthermore, the export licensing required to export the these restricted products is not automatic. In contrast, China also maintains an au tomatic export licensing system. Article 15 of the 
Foreign Trade Law  instructs MOFCOM and its partner in stitutions to grant approval whenever 
exporters seeking to export the unrestricted goods subject to automatic licensing apply for the 
automatic licenses. However, for goods whose exporta tion is designated for restriction, MOFCOM is 
not required to grant its approval to  applicant exporters and is author ized to impose various conditions 
on their exportation. 
32. Export licensing is thus a measure that restricts the exportation of these products in breach of 
China's obligations under Article XI:1 of the GATT 1994. Paragraphs 162 and 165 of the Working 
Party Report contain enforceable commitments with  respect to the elimination of non-automatic 
export licensing. China's export licensing is also in consistent with paragra phs 162 and 165 of the 
Working Party Report and paragraph 1. 2 of China's Accession Protocol.   
E. C
HINA 'S MINIMUM EXPORT PRICE REQUIREMENT IS INCONSISTENT WITH CHINA 'S 
OBLIGATIONS UNDER THE GATT  1994 
33. China's minimum export price requirement for bauxite, coke, fluorspar, magnesium, silicon 
carbide, yellow phosphorus, and zinc, as described above, prohibits the exportation of these products 
if the export price does not meet a designated minimum. This constitutes a restriction on the 
exportation of these materials in contravention of  China's obligations under Article XI:1 of the 
GATT 1994.   
34. Furthermore, China administers the minimum export price requirement for yellow phosphorus 
through an enhanced enforcement mechanism know n as the Price Verification and Chop ("PVC") 
procedure. The PVC procedure involves the partic ipation of the CCCMC in the customs clearance 
process for yellow phosphorus. The CCCMC's participa tion permits the flow of exporters' sensitive 
commercial information to representatives of parti es with interests that are in conflict with the WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page C-8 
  
  exporters. 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.   
35. Finally, China's failure to publish its laws, regul ations, decisions, and rulings pertaining to the 
minimum export price requirement for these Raw Materi als, is inconsistent with China's obligations 
under Article X:1 of the GATT 1994. 
IV. CONCLUSION 
36. For the reasons set forth in this submission, Mexico respectfully requests the Panel to find 
that China's measures, as set out above, are inc onsistent with China's obligations under the 
GATT 1994 and the Accession Protocol. Mexico furthe r requests, pursuant to Article 19.1 of the 
DSU, that the Panel recommend that China bring its measures into conformity with the GATT 1994 and the Accession Protocol. 
 
  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page C-9 
  
  ANNEX C-2 
 
ADDITIONAL OPENING ORAL STATEMENT OF MEXICO AT THE FIRST 
SUBSTANTIVE MEETING 
  
1. As a final remark to be added to our view s and conclusions expressed in the joint oral 
statement, Mexico would like to stress one add itional point on China's first written submission.  
2. In its submission, China tries to justify its expor t restraints, and even differentiate itself from 
other WTO Members, by considering itself a devel oping country in the need for industrialization and 
growth.
1  
3. However, China is not the only developing c ountry in the need for industrialization and 
growth.  In spite of China's developing country st atus, China is considered the second economy in the 
World and the main producer of many of the raw materials at issue in this dispute.  
4. Furthermore, China's steel industry – a highly developed industry benefiting from its export 
restrains – contributed in 2009 to approximately 45% of the world's steel production, whereas Mexico, for example, contributed to less than 1.2% of that world's production. Thus, China's industrialization policy comes at the expense of  other WTO Members and has a potentially more 
harmful effect against developing countries like Mexico. 
5. Any Member benefiting from the WTO trading system must abide by the WTO rules, 
regardless of being considered as a de veloping or a developed country.  
6. Mexico, as any other developing country in th e WTO, seeks to create the most adequate 
policies to promote industrialization and growth, taking into consideration WTO flexibilities provided 
for developing countries. However, while seeking those policies, all WTO Members must abide by 
the WTO rules. Thus, like all other developing co untry members, China must also abide by WTO 
rules, including the flexibility limits a nd checks and balances provided therein. 
7. Mr. Chairman and Members of the Panel and the Secretariat, this concludes Mexico's oral 
statement. We thank you for your attention, a nd would be pleased to respond to any questions you 
might have. 
                                                      
1 See for example, China's first written submission, paras.128-130 and 480. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page C-10 
  
  ANNEX C-3 
 
CLOSING ORAL STATEMENT OF MEXICO  
AT THE FIRST SUBSTANTIVE MEETING 
 
  Mr. Chairman, we would just like to thank you,  the Members of the Panel, the Secretariat and 
our counterparts, for your attention to our interven tions throughout this hearing, and also thank you in 
advance for an additional and final comment we w ould like to make, specifically on China's opening 
statement, as it refers in many ways to political and conceptual positions towards the rights of China 
as a developing country and its sovereignty rights.    We might agree with the political discourse or the concepts, but unfortunately, those are far 
related or impossible to read as legal rights or oblig ations of a WTO Member. We have come here not 
to discuss the systemic concerns of a Member on how the WTO functions but to discuss the rights and 
obligations of Members under the WTO, and in this  particular dispute, the application of the 
exceptions to those obligations, exceptions clearly  contained in the GATT Agreement, including how 
they were legally reflected in China's Accession Protocol.  
 
  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page C-11 
  
  ANNEX C-4 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION  
OF MEXICO 
  
I. INTRODUCTION 
1. At the heart of the dispute are the export du ties and export quotas that China maintains on 
these products.  China fails to rebut the complainants' claims that the export restraints are inconsistent 
with China's commitments in its Protocol of Ac cession to the WTO, which incorporates commitments 
made by China in the Report of the Working Pa rty on China's Accession to the WTO, and  its 
obligations under the GATT 1994.  In fact, China largely concedes the inconsistency of the export 
restraints with the relevant obligations.   
2. China invokes Article XX(b) in an attempt to portray certain of the discriminatory export 
restraints as necessary for protection of health. But, a review of the facts confirms that China's defense 
does not withstand scrutiny. Similarly, China's invocation of the exception related to conservation in Article XX(g) to justify certain of the export restra ints also fails.  Finally, China has also failed to 
demonstrate that one of its export quotas for which it invokes Article XI:2(a) is justified pursuant to 
that provision.  China's statements in the course of this dispute have confirmed that the export 
restraints have the objective of ensuring China's continued economic growth.  As China states: "The 
imposition of export restrictions will allow China to de velop its economy in the future . . ."  This, and 
other statements that we will discuss, belie Ch ina's arguments in support of its defenses. 
3. Finally, China administers its export restraints  in a WTO-inconsistent manner through the use 
of export licensing, restrictions on the right to e xport, and minimum export pricing.  China has also 
failed to rebut these claims. 
II. CHINA'S EXPORT DUTIES ARE INCONSISTENT WITH CHINA'S OBLIGATIONS 
UNDER PARAGRAPH 11.3 OF THE ACCESSION PROTOCOL 
4. The export duties China imposes on bauxite, c oke, fluorspar, magnesium, manganese, silicon 
metal, yellow phosphorus and zinc ar e inconsistent with China's oblig ations under paragraph 11.3 of 
the Accession Protocol.  China does not attempt to defend the duties that it imposes on bauxite, silicon 
metal, and one form of manganese (ores and concen trates) or the special export duties it imposes on 
yellow phosphorus.  Instead, China attempts only to justify  the export duties it imposes on coke and 
fluorspar (which it imposes in combination with export quotas), magnesium scrap, manganese scrap, 
and zinc scrap, and magnesium metal, and mangane se metal, under exceptions  provided in Article XX 
of the GATT 1994. 
5. For the reasons set forth in the complainants' fi rst oral statement, the exceptions in Article XX 
are not available as a defense to a breach of th e export duty commitments in  paragraph 11.3 of the 
Accession Protocol.  Therefore, China's reliance on the exceptions contained in Article XX of the 
GATT 1994 to justify its export duties on coke, fl uorspar, magnesium and manganese metal, and 
magnesium, manganese, and zinc scrap is unavailing.  An analysis of the text of paragraph 11.3, the 
Appellate Body's reasoning in China - Audiovisual Products , and the relevant context of China's 
export duty commitment all support the conclusion that Article XX is not appli cable to paragraph 11.3 
of the Accession Protocol. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page C-12 
  
  6. Even aside from the fact that Article XX of the GATT 1994 is not  available as a justification 
for breaches of the commitment in paragraph 11.3 of the Accession Protocol, China would not meet 
the conditions required by Article XX(g) and Article XX(b). 
7. In order to justify these inconsistent export rest raints, it is China's burden to demonstrate that 
each measure at issue satisfies the specific conditions  set out in sub-paragra ph (g) or sub-paragraph 
(b) of Article XX, and that each measure also sa tisfies the requirements of Article XX's chapeau.  
8. China's export duties on scrap products are not justified under Article XX(b) of the 
GATT 1994.  First, China has presented no evidence that the export duties on scrap products have 
made any contribution, let alone a material contributi on, to increased levels of secondary production.  
China relies instead on projections of supposed in creases in secondary production in the future.  
Second, Dr. Olarreaga's economic analysis setting fort h such projections is fundamentally flawed and 
therefore unreliable.  Third, even if Dr. Olarreaga' s analysis were taken on its own terms, the increases 
in secondary production that would supposedly r esult from the export duties are modest and belie 
China's contention that the measures can make a "mat erial contribution" to the stated environmental 
objective.  Fourth, many of China's arguments are premised on factual inaccuracies regarding the products themselves.  Fifth, China's assertion of su pposed supply constraints to the extent they are 
relevant to an analysis under Article XX(b) – fa il to support China's defense.  Sixth, primary 
production of magnesium metal, manganese metal, a nd zinc continue to expand in China further 
undercutting China's assertion that it seeks to shift to increased secondary production.  Seventh, there 
are a number of WTO-consistent reasonably available alternatives that China could employ to more 
directly address China's stated environmental objectives.  
9. China's export duties on magnesium metal, mangane se metal, and coke are also not justified 
under Article XX(b).  First, China has presented no evidence that the export duties on magnesium 
metal, manganese metal, or coke have made any co ntribution, let alone a material contribution, to 
decreased levels of production of those products.  China relies instead on projections of supposed 
increases in secondary production in the future.  Sec ond, primary production of the metals has in fact 
increased, and these products continue to be exported at  significant levels in the form of downstream, 
higher-value added products.  Third, Dr. Olarreaga' s economic analysis setting forth such projections 
is fundamentally flawed and therefore unreliable.  Fourth, there are a number of WTO-consistent 
reasonably available alternatives that China could employ to more directly address China's stated 
environmental objectives.  Thus, China's defense under Article XX(b) relating to magnesium metal, 
manganese metal, and coke should not be sustained.  
10. In examining whether China's export duty on fluor spar relates to conservation of fluorspar, 
the operative question is whether there is a close a nd genuine relationship of ends and means between 
the goal of fluorspar conservation and the means presented by the export duty. The answer to this 
question is no.  
11. China also fails to demonstrate that its e xport duty on fluorspar is "made effective in 
conjunction with restrictions on domestic production or consumption."  China asserts that it has a 
"conservation policy" consisting of a number of m easures "to manage the supply, production, and use 
of fluorspar." As discussed below, these measure s do not constitute "restrictions on domestic 
production or consumption." The export duty on fl uorspar therefore is not "made effective in 
conjunction with" such restrictions.  Even if China had demonstrated the existence of restrictions on 
domestic production or consumpti on, China would still not have demonstrated the requisite even-
handedness to justify its export duty on  fluorspar under Article XX(g).  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 Page C-13 
  
  12. Mexico sets forth its arguments regarding the me asures within the Panel's terms of reference 
and the appropriate measures on which the Panel' s findings and recommendations should be made 
below.  Should the Panel, arguendo , review the export restraints as applied by China in 2010, and 
should the Panel consider the measures China im plemented over the course of this proceeding's 
pendency through the summer of 2010 relevant to that review arguendo , Mexico addresses the export 
duty on fluorspar applied in 2010 in light of tho se measures below.  As Mexico demonstrates, the 
measures China has introduced over the course of 2010 do not alter the fact that China's export duty 
on fluorspar is not justified unde r Article XX(g) of the GATT 1994. 
13. The burden of establishing conformity with th e relevant subparagraph and the chapeau lie 
with the party invoking the defense.  Even if th e export duties at issue were consistent with the 
particular paragraph of Article XX that China in vokes, the export duties also fail to satisfy the 
chapeau  of Article XX. 
14. In China's first written submission and its oral statement to the Panel at the first meeting, 
China made no serious attempt to satisfy its burden  of establishing that the export duties satisfy the 
chapeau . China has articulated the in correct legal standard for "arbitrary or unjustifiable 
discrimination" under the chapeau .  This renders China's statement that the export duties at issue do 
not discriminate between export destinations insufficien t to satisfy its burden.  China also asserts that 
the export duties do not constitute a disguised restric tion on international trade because they are "not 
applied in a manner that constitutes a concealed or unannounced restriction or discrimination in 
international trade."  China fails to present any evidence or argumentation to substantiate this 
assertion.  This is insufficient to satisfy China's bur den of demonstrating that its measures satisfy the 
requirements of the chapeau .  
III. CHINA'S EXPORT QUOTAS ARE INCONSISTENT WITH CHINA'S 
OBLIGATIONS UNDE R ARTICLE XI:1 OF THE GATT 1994 AND PARAGRAPHS 
162 AND 165 OF THE WORKING PARTY REPORT 
15. As Mexico sets forth in its first written subm ission, China subjects the exportation of various 
forms of bauxite, coke, fluorspar, silicon carbide, and zinc to quotas.  China has confirmed that it 
maintains a prohibition on the exportation of zinc.  These export quotas and the export prohibition on 
zinc are inconsistent with Article XI:1 of th e GATT 1994 and paragraphs 162 and 165 of the Working 
Party Report and paragraph 1.2 of China's Accession Protocol.  China has failed to establish that its 
export quota on one subset of one form of bauxite is justified pursuant to Article XI:2(a) or 
Article XX(g) of the GATT 1994.  China has also fail ed to establish that its export quotas on coke and 
silicon carbide are justified pursuant to Article XX(b) of the GATT 1994. 
16. China has attempted to justify the export quota on bauxite only as it applies to a particular 
product that China calls "refractory grade bauxite".  The product that China calls "refractory grade 
bauxite," is actually a subset of "refractory clay " (2508.3000) and not a product considered to be 
within "aluminum ores and concentrates" (2606.0000 ).  Because of the confusion engendered by the 
fact that a product that falls within "aluminum or es and concentrates" (2606.0000) with high alumina 
content is also commonly referred to as "refract ory grade bauxite," Mexico will, for purposes of 
clarity and precision, refer to the product for which China asserts its defense, as "high alumina clay."  
17. China's selective defense of the export quota imposed on "bauxite" only insofar as the quota 
applies to "high alumina clay" highlights the fact that China's efforts are focused essentially on 
defending a non-existent or fictional measure.  There is no export quota on high alumina clay.  
Because China does not defend the export quota on "bauxite" as a whole, China has already 
effectively conceded the inconsistency of that quot a.  The export statistics China cites raise the WT/DS394/R/Add.1 
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  possibility and the serious concern that, through Ch ina's allocation of the export quota on "bauxite," 
China may be effecting an export prohibiti on on "aluminum ores and concentrates."  
18. Even if there were a measure imposing an export quota on "high alumina clay," China's 
defense under Article XI:2(a) as it relates to high alumina clay is without merit.  First, China 
advocates an exceptionally broad meaning of the term  "essential" products in Article XI:2(a) that 
would permit any industrial input to satisfy the meani ng of "essential."  This is an incorrect reading of 
the term "essential."  Even if China's reading of  "essential" were correct, however, China's argument 
is based on several factual inaccuracies regarding the role of high alumina clay in steel production.  
These factual inaccuracies confirm that China's defen se is unavailing. Second, China fails to properly 
analyze the meaning of the term "critical shortage ," and instead bases its defense under Article XI:2(a) 
merely on the limited availability of high alumina clay.  By doing so, China reads the term "critical" 
out of Article XI:2(a) altogether.  This approach is in consistent with the text of Article XI:2(a).  Third, 
the export quota is not "temporarily applied" within th e meaning of Article XI:2(a).  Finally, contrary 
to China's arguments, Article XI:2(a) is an affirm ative defense, for which China bears the burden of 
adducing evidence and argumentation to establish the de fense.  Article XI:2(a) sets out an exception 
to the obligation in Article XI:1, not a separate obligation.   
19. In examining whether China's export quota on bauxite, as applied to high alumina clay, 
relates to the conservation of high alumina clay, the operative question is whether there is a close and 
genuine relationship of ends and means between the goal of high alumina clay conservation and the 
means presented by that part of the export quota that applies to exports of high alumina clay.  As 
above in the case of fluorspar, the answer to this question is also no. 
20. China also fails to demonstrate that its expor t quota for bauxite, as it applies to high alumina 
clay, is "made effective in conjunction with rest rictions on domestic produc tion or consumption."  
China asserts that it has a "conservation policy" c onsisting of a number of measures "to manage the 
supply, production, and use of [high alumina clay ]."  As discussed below, these measures do not 
constitute "restrictions on domestic production or consumption."  The export quota, which applies to 
the raw material category "bauxite" including both "refractory clay" (2508.3000/2508.300000) and "aluminum ores and concentrates" (2606.0000/2606 000000), is not "made effective in conjunction 
with" such restrictions on "high alumina clay" a nd therefore is not imposed "even-handedly" as 
Article XX(g) requires.  Even if China had demons trated the existence of restrictions on domestic 
production or consumption, China w ould still not have demonstrated the requisite even-handedness to 
justify its export quota, as applied to high alumina clay, under Article XX(g). 
21. Mexico sets forth its arguments below regardi ng the measures within the Panel's terms of 
reference and the appropriate measures on which th e Panel's findings and recommendations should be 
made.  Should the Panel, arguendo, review the ex port restraints as applied by China in 2010, and 
should the Panel consider the measures China im plemented over the course of this proceeding's 
pendency through the summer of 2010 relevant to that review, arguendo, Mexico addresses the export 
quota on bauxite, as it is applicable to high alumina clay, applied in 2010 in light of those measures 
below.  As Mexico demonstrates, the measures China has introduced over the course of 2010 do not 
alter the fact that China's export quota on bauxite, as applied to high alumina clay, is not justified 
under Article XX(g) of the GATT 1994. 
22. China contends that the export quotas on coke and silicon carbide are justified pursuant to 
Article XX(b) of the GATT 1994.  China's arguments in support of this defense are the same as those 
advanced in the context of China's export duties on  coke, magnesium metal, and manganese metal.  In 
other words, China argues that the production of coke and silicon carbide result in environmental 
pollution.  The export quotas, according to Chin a, are "necessary" to reduce production of these  WT/DS394/R/Add.1 
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  materials in China, and therefor e reduce pollution.  China's defen se fails for the same reasons as 
discussed above in the context of the export duties on magnesium metal, manganese metal, and coke.  
23. For the same reasons China fails to demonstrate that the export duties it attempts to justify 
satisfy the chapeau of Article XX, China also fails to demonstrate that the export quotas it attempts to 
justify satisfy the chapeau of Article XX. 
IV. TERMS OF REFERENCE ISSUES RELATE D TO CHINA'S EXPORT DUTIES AND 
EXPORT QUOTAS  
24. Both with regard to its theory that measures within the Panel's terms of reference may be 
disregarded, and in its reliance on the 2010 measure s to defend the measures within the Panel's terms 
of reference, China's arguments and assertions are mi sguided or simply incorrect.  China's claim that 
the Panel should exercise its "discretion" not to ma ke findings on the measures within its terms of 
reference is without merit, unsuppor ted by the provisions of the DSU. 
25. Contrary to China's suggestion, the Panel is authorized and charged by the DSU to make 
findings and recommendations on the me asures in its terms of reference B which includes the export 
quotas and export duties applied through the legal in struments that are listed in the panel request. 
26. The legal instruments that took effect on January  1, 2010 (the January 1, 2010 Measures), i.e., 
after panel establishment, are outside the Panel' s terms of reference.  These legal instruments 
"changed the essence" of the legal instruments that were  in effect at the time of panel establishment, 
and thus are not sufficiently similar to the measures th at are within the Panel's terms of reference to be 
considered in this dispute. Were  the Panel to consider the Janua ry 1, 2010 Measures and the 2010 
Fluorspar and High Alumina Clay Measures adopted in January, March, Apr il, May, and June of 
2010, this would permit China, by changing the paramete rs of the Panel's review, to shield aspects of 
its measures from proper review.  
V. CHINA'S ADMINISTRATION AND ALLOCATION OF ITS EXPORT QUOTAS 
ARE INCONSISTENT WITH CHINA'S OBLIGATIONS UNDER THE ACCESSION PROTOCOL, THE WORKING PARTY REPORT, AND THE GATT 1994 
27. As Mexico explained in its first written submission, China's administration and allocation of 
its export quotas are inconsistent with China's ob ligations under the Accession Protocol, the Working 
Party Report, and the GATT 1994.  China has failed to  rebut Mexico’s showing that China's measures 
restricting access to the export quotas, China's admi nistration of its export quotas in a partial and 
unreasonable manner, and China's total award price under the export quota bidding regime are 
inconsistent with China's WTO obligations 
VI. EXPORT LICENSING 
28. Mexico demonstrated in its first written subm ission that China subjects the exportation of 
bauxite, coke, fluorspar, manganese, silicon carbide , and zinc to export licensing that is non-
automatic, in breach of the requirements of Article XI:1 of the GATT 1994.  China itself considers its 
export licensing for products designated for restri cted exportation pursuant to Article 19 of the 
Foreign Trade Law to be a restriction on export ation inconsistent with Article XI:1 of the 
GATT 1994.  China has proffered no arguments or facts to justify its export licensing system.  
Accordingly, China has not demonstrated that its  export licensing on the products at issue can be 
justified under the GATT 1994. WT/DS394/R/Add.1 
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  VII. MINIMUM EXPORT PRICE 
29. Mexico has demonstrated that China impo ses a minimum export price requirement for 
bauxite, coke, fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc that restricts the 
exportation of these products in contravention of Ar ticle XI:1 of the GATT 1994.  China has failed to 
rebut that showing.  In its first written submission,  Mexico demonstrated that China failed to publish 
important measures and provisions relating to its minimum export price requirement.  China's only 
response is that these measures are no longer in effect .  However, a measure no longer being in effect 
is not a defense for the failure to publish under GATT Article X:1.  
30. In its first written submission, Mexico also demonstrated that China's administration of the 
minimum export price system through the involvement of the CCCMC in the Price Verification and Chop (PVC) Procedure was partial and unreasona ble in breach of China's obligations under 
Article X:3(a) of the GATT 1994.  China has failed to rebut that showing.  
31. On October 1, 2010, the Panel issued the "S econd Phase of the Preliminary Ruling" (Second 
Preliminary Ruling).  The Second Preliminary Rulin g included findings on issues not subject to any 
request for a preliminary ruling.   In particular, the Panel made findings on arguments of China in its first written submission that certain minimum export price (MEP) measures addressed by Mexico should be outside the Panel's terms of reference unde r Article 6.2 of the DSU.  Because these findings 
in the Second Preliminary Ruling were not made in  response to a preliminary ruling request, they 
cannot be part of a preliminary ruling, and instead, pursuant to the DSU and Working Procedures, 
must be considered as findings that the Panel w ill reexamine de novo after considering all of the 
evidence and arguments submitted in the dispute.  Accordingly, Mexico sets forth a written response 
to China's arguments in its First Written Submissi on.  Mexico respectfully requests that the Panel 
consider these responses before making findings w ith regard to China's MEP terms-of-reference 
arguments.   
32. There are three additional measure s that China fails to identify that are within the Panel's 
terms of reference by virtue of being included in both the consultations and panel requests:  Measures 
for the Administration of Trade Social Organiza tions; Regulations for Pe rsonnel Management of 
Chambers of Commerce; and CCCMC Charter.  In add ition, four measures are in the Panel's terms of 
reference even though they were not identified in both Mexico’s consultati ons request and Mexico’s 
panel request:  CCCMC Export Coordination Measur es; Bauxite Branch Coordination Measures; 
Bauxite Branch Charter; and the "System of self-d iscipline".  These measures are within the Panel's 
terms of reference because they implement th e coordination mandate of the 1994 CCCMC Charter 
and the 2001 CCCMC Charter in the manner described by the Appellate Body in Japan – Film .  Three 
measures that were specifically identified in th e panel request but not listed in the consultations 
request are nevertheless included within the Panel' s terms of reference: Notice of the Rules on Price 
Reviews of Export Products by the Customs; CC CMC PVC Rules; Online PVC Instructions.  These 
measures are all part of the same PVC procedur e of which the 2002 PVC Notice and the 2004 PVC 
Notice, which were consulted on, form a part.  The inclusion of these thr ee measures in the panel 
request did not, "expand the scope of the dis pute" as the Appellate Body described in US – Continued 
Zeroing .  These measures are therefore also properl y within the panel's terms of reference. 
33. China also asked the Panel to refrain fro m making findings on measures because those 
measures have "expired" and findings would "serve  no purpose." China also asserted that the Panel 
has no authority to make recommendations on the se measures.  The Panel has the authority and 
obligation to make findings and recommendations on certain measures which, contrary to China's 
arguments and assertions, continue to be in effect.  The Panel has the authority and obligation to make  WT/DS394/R/Add.1 
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  findings and recommendations on the other measures in order to secure a positive solution to this 
dispute.  
VIII.  CONCLUSION 
34. For the reasons set forth in this submission, Mexico respectfully requests the Panel to find 
that China's measures, as set out above, are inc onsistent with China's obligations under the 
GATT 1994 and the Accession Protocol.  Mexico furt her requests, pursuant to Article 19.1 of the 
DSU, that the Panel recommend that China bring its measures into conformity with the GATT 1994 and the Accession Protocol. 
 
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  ANNEX C-5 
 
OPENING ORAL STATEMENT OF MEXICO AT THE  
SECOND SUBSTANTIVE MEETING 
  
I. INTRODUCTION 
1. Mr. Chairman and members of the Panel. I would first like to thank the Panel and the 
Secretariat Staff for the opportunity given to Mexico to present its views in this dispute. 
2. Since the other co-complainants have already presented their arguments, which Mexico fully 
supports and incorporates into this opening statement
1, Mexico will only raise some additional issues 
that it considers of great importance in this dispute. 
3. As Mexico has already explained, the export restraints imposed by China are designed to 
advance its economy through the promotion of the production of high-value added downstream 
products, and thus, pursue economic interests rather th an environmental or conservationist interests. 
However in order to justify those restraints, thr oughout the proceedings of this dispute, China has 
presented arguments and suggested interpretations  of the relevant exceptions within the WTO 
framework that not only should be rejected in the cont ext of this dispute, but should also be rejected 
as they pose a potential systemic threat to the export framework within the WTO trading system. 
II. THE PANEL SHOULD NOT ACCEPT CHINA'S REQUEST TO REFRAIN FROM 
RULING ON THE 2009 MEASURES 
4. China argues that the Panel has the discretion to make findings concerning certain expired 
measures which were in effect during 2009 but cease d to exist on 2010, but encourages the Panel not 
to make findings on those expired measures.2 As a practical matter, this means that China is 
requesting the Panel to refrain from ruling on th e special export duty on yellow phosphorus, the 
export duty on bauxite, and the export quota on fluorspar.  
5. However, contrary to China's argument, Mexico has explained that the Panel is not only 
authorized, but also charged by the DSU to make  recommendations on the measures within its terms 
of reference, which include the special export dut y on yellow phosphorus, the export duty on bauxite 
and the export quota on fluorspar.3 Thus, the Panel should not accept China's request. 
6. If the Panel accepts China's request and refrains from ruling on the consistency of the special 
export duty on yellow phosphorus, the export duty on  bauxite and the export quota on fluorspar, it 
will be giving China the possibility to reinstate tho se measures at any time in the future, and the Panel 
will have not completely secured a positive solution to this dispute.   
7. This reasoning, if applied on a general basis, could open the door to any defending Party to 
remove the inconsistent measure during the time of the WTO proceeding in order to avoid a ruling on 
the measure, and thereafter, reinstate the measure at any time. This will be to the detriment of the aim 
                                                      
1 Including Exhibit JE- 176 presented by the United Stat es in its oral statement, containing the Revised 
Chart B in Response to Question 2 from the Panel. 
2 China's second written submission, paras. 6-18. 
3 Mexico's second written submission, paras. 322-348.  WT/DS394/R/Add.1 
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  of the dispute settlement mechanism of  securing a positive solution to a dispute,
4 the aim of the 
recommendations and rulings made by the DSB of ac hieving a satisfactory settlement of the matter,5 
and the function of the panel of assisting the DSB in discharging its responsibilities under the DSU 
and the covered agreements.6 
8. As already explained,7 regarding this situation, the Appellate Body in Chile – Price Band 
System stated: 
We emphasize that we do not condone a practice of amending measures during 
dispute settlement proceedings if such cha nges are made with a view to shield a 
measure from scrutiny by a panel or by us …. [Generally] speaking, the demands of 
due process are such that a complaining Part y should not have to adjust its pleading 
throughout the dispute settlement proceedings  in order to deal with a disputed 
measure as a "moving target".8 
9. Accordingly, Mexico requests the Panel to consider  the potential systemic risk that the type of 
reasoning that China is requesting the Panel to apply would pose to the WTO trading system.  
III. THE PANEL SHOULD REJECT CHINA'S ARGUMENT THAT ARTICLE XX 
EXCEPTIONS ARE AVAILABLE TO BREACHES OF ITS EXPORT DUTIES COMMITMENTS CONTAINED IN PARAGRAPH 11.3 OF THE ACCESSION PROTOCOL 
10. China argues that the GATT article XX defenses ar e available to breaches of its export duties 
commitments contained in paragraph 11.3 of the A ccession Protocol. In this dispute, this reasoning 
would mean that article XX defenses are availabl e to the export duties imposed by China on coke, 
fluorspar, magnesium, manganese metal, and magnesium, manganese, and zinc scrap. 
11. However, China is incorrect in its legal in terpretation. As the co-complainants have 
explained, the article XX defenses are not available to breaches by China of its export duties 
commitments contained in paragraph 11.3 of the Accession Protocol
9 and the Panel should reject 
China's superficial reasoning. 
12. In principle, article XX defenses, according to its chapeau, which states "nothing in this 
agreement" - and not any other language - , are ava ilable to breaches of the obligations contained in 
the GATT 1994. However, according to the reasoning of the Appellate Body  in China – Audiovisual 
Products ,10 the article XX defenses can be available to breaches of obligations c ontained in provisions 
outside from the GATT 1994, but only if there is a textual basis within the provision containing that 
obligation, indicating that article XX defenses are available to it. In the case at issue, article XX 
defenses are not available to breaches of the expor t duties commitments contained in paragraph 11.3 
of the Accession Protocol, in principle, because those commitments are outside from the GATT 1994, 
and also because there is no textual basis in para graph 11.3 of the Accession Protocol, indicating the 
availability of the Article XX defenses. 
                                                      
4 Article 3.7 of the DSU 
5 Article 3.4 of the DSU 
6 Article 11 of the DSU 
7 Mexico's second written submission, para. 346 
8 Appellate Body Report in Chile – Price Band System , para. 144. 
9 Mexico's Second Written Submission, paras. 10 – 29. 
10 Appellate Body Report in China – Audiovisual Products , paras.  218 – 233. WT/DS394/R/Add.1 
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  13. However, in order to demonstrate that article XX defenses are available, China has offered 
various arguments
: 
(a) That according to China's interpretation of the Appellate Body's reasoning in China – 
Audiovisual Products, when ruling with respect to paragraph 5.1 of the Accession 
Protocol, China has an inherent right to re gulate trade that allows it to breach any of 
its export duties commitments.11 This argument has evolved throughout China's 
submissions to the argument that China has an inherent right to regulate trade that makes article XX exceptions available to  breaches of its export duties commitments 
contained in paragraph 11. 3 of the Accession Protocol.
12  
(b) That, at least with respect to goods relate d obligations, the WTO covered Agreements 
apply together as a single treaty instrume nt, as a single undertaking accepted by all 
the WTO Members, namely, the WTO Agreement, and thus, the covered agreements, read together as a single treaty framework , allow China to apply export duties, 
provided it complies with the requirements of  the relevant exception in article XX, 
and its chapeau.
13 
(c) That paragraph 170 of the Working Party Report provides a language similar to the 
language of paragraph 5.1 of the Accession Protocol, that gives China the text in 
which to base the availability of article XX to the commitments in paragraph 11.3 of 
the Accession Protocol.14 
14. China's first reasoning, if applied on a genera l basis, would mean that any defending party 
could claim that the article XX defenses are avai lable for them to breaches of any commitment 
outside of the GATT 1994, because all the WTO Member s have an inherent right to regulate trade 
that makes article XX available for them to any breach of any covered agreement or Accession Protocol. 
15. China's second reasoning, if applied on a general basis, would mean that all the  obligations 
related to trade in goods contained in all the cove red agreements, could have  available to them the 
defenses contained in the GATT 1994, regardless of the language of the obligation and the covered 
agreement in which that obligation is contained. 
16. Finally, China's third reasoning, if applied on a general basis, would mean that the textual 
basis in which to base the availa bility of article XX could be in ferred from other provisions, and not 
clearly indicated in the specific provision at issue.  
17. Mexico again requests the Panel to consider th e potential systemic risk that the type of 
reasoning that China is requesting the Panel to appl y in order to make available for its export duties 
the article XX defenses would pose to the WTO trading system.  
                                                      
11 China's first opening statement, paras. 61 – 83. 
12 China's second written submission, paras.  154-178. 
13 Id. 
14 Id.  WT/DS394/R/Add.1 
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  IV. THE PANEL SHOULD REJECT THE IN TERPRETATION OF ARTICLE XI:2(A) 
SUGGESTED BY CHINA TO JUSTIFY ITS EXPORT QUOTA ON BAUXITE, AS IT APPLIES TO HIGH ALUMINA CLAY 
18. China has suggested an interpretation of article XI:2(a) in order to demonstrate that the export 
quota applied to bauxite, as it applies to high alumin a clay, is justifiable under the exception contained 
in that provision. 
19. Firstly, China argues that the burden of proof lies on the complaining Party with respect to the 
applicability of article XI:2(a), which Ch ina does not see as an affirmative defense.
15 
20. Contrary to China's assertions, the language of paragraph Article XI:(2 )(a) demonstrates that 
this provision constitutes an exception to the oblig ations contained in article XI, an affirmative 
defense whose burden of proof lies on the defending party choosing to use this exception. 
21. China's reasoning is legally flawed and, if accep ted, will create a legal absurdity in which the 
complaining Party will have to predict the defense that the defending Party will use in its argument, 
and prove that those predicted arguments are not appli cable for that defense. In the case at issue here, 
the co-complainants would have had to predict that  China was going to use this exception to defend 
its export quota on bauxite, and then prove that the quota is not applied temporarily by China to 
prevent or relieve critical shortages of an essentia l product. This line of reasoning would present an 
absurd result. 
22. Regarding the interpretation of th e language of article XI:(2)(a),  China offers an interpretation 
of the terms "temporary", "essential" and "critical  shortage" that can be summarized as follows: 
(a) The export quota applied to refractory grade bauxite is "temporarily applied" within 
the meaning of article XI:(2)(a) even though it is permanently applied, because the refractory grade bauxite will cease to exis t in the future and the measure is 
periodically reviewed.
16 
(b) The export quota applied to refractory grade bauxite is "essential" within the meaning 
of article XI:(2)(a) because it is of value as an input for downstream processors of a 
powerful industry in China.17 
(c) The export quota applied to refractory grade ba uxite is applied to prevent or relive a 
"critical shortage" because some day the refractory grade bauxite will cease to exist.18 
23. Yet again, China failed to offer a correct interp retation of these terms. If this interpretation is 
accepted, it would allow Members to impose export r estrictions or prohibitions on any product which 
some day might cease to exist because they would be automatically considered as temporarily 
applied", and imposed to prevent or relief a "critic al shortage". Also, the term "essential" would 
become almost self-judging. This situation w ill basically render null the terms "temporary", 
"essential" and "critical shortage". 
                                                      
15 China's second written submission paras. 29 – 36. 
16 See, for example, China's first written submission, paras. 490 – 492. 
17 See, for example, China's first written submission, paras. 431 – 461. 
18 See, for example, China's first written submission, paras. 462 – 489. WT/DS394/R/Add.1 
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  24. It will also allow any WTO Member to impose export restrictions on an y exhaustible natural 
resource, without the need to comply with the ev en handedness requirement of article XX(g), and the 
requirements of the chapeau.  
25. Here again, Mexico requests the Panel to consider  the potential systemic risk that the type of 
reasoning that China is requesting the Panel to apply would pose on the WTO trading system. 
V. THE PANEL SHOULD REJECT THE INTERPRETATION OF ARTICLE XX:(G) 
SUGGESTED BY CHINA TO JUSTIFY ITS EXPORT QUOTA ON BAUXITE, AS IT APPLIES TO HIGH ALUMINA CLAY, AND ITS EXPORT DUTY ON  FLUROSPAR 
26. In order to justify its export quota on bauxite, as it applies to high alumina clay, and its export 
duty on fluorspar under article XX(g), China has offere d and interpretation of the requirement of even 
handedness, suggesting that as long as some form of restriction is imposed on domestic users the 
requirement will be met, and that no partic ular distribution of the burden is required.
19  
27. China's suggested interpretation, if applied on a general basis, would mean that any minor 
requirement imposed on the domestic users, in cont rast with a burdensome restriction imposed on the 
foreign users, will meet the requirement that the restriction is made effective in conjunction with 
domestic restrictions on pr oduction or consumption.  
28. This interpretation is flawed and should be re jected by the Panel because it makes the even 
handedness requirement not even-handed.  
VI. THE PANEL SHOULD REJECT THE INTERPRETATION OF ARTICLE XX(B) 
OFFERED BY CHINA TO JUSTIFY ITS EXPORT DUTIES ON COKE, 
MAGNESIUM METAL AND MANGANESE METAL, AND MAGNESIUM METAL, MANGANESE METAL AND ZINC SCRAP AND ITS EXPORT QUOTAS ON COKE AND SILICON CARBIDE  
29. China has also suggested an interpretation of ar ticle XX(b) to justify its export duties on coke, 
magnesium metal, manganese metal, zinc, and ma gnesium metal, manganese metal and zinc scrap, 
and its export quotas on coke and silicon carbide that the Panel should reject. 
30. China argues that its export duties on coke, ma gnesium metal, manganese metal, and its 
export quotas on coke and silicon carbide,  are justif ied under article XX(b) because the production of 
these products is environmentally harmful and the ex port duties will lead to a reduction of production, 
and therefore, a reduction on the pollution associated with their production. China also argues that its 
export duties on magnesium metal, manganese metal a nd zinc scrap, are justified under article XX(b) 
because secondary production is less environmentally harmful and the export duties ensure a steady 
supply on scrap and facilitate a shift from primary production to secondary production.
20 
31. If the interpretation offered by China is accepte d, and applied on a general basis, it would 
allow any WTO Member to freely impose export restraints on any product whose production causes 
pollution. The fact that most industries pollute at  some level makes this interpretation even more 
dangerous.  
                                                      
19 China's second written submission, paras. 195-198. 
20 See, for example, China's second written submission, paras. 278 -289.  WT/DS394/R/Add.1 
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  32. Also, since it is the production of those produc ts that causes pollution and not their exports, 
accepting this interpretation would render the necessity  requirement of article XX(b) null. It will make 
it so broad that any small contribution to the reducti on of pollution could be considered as "necessary" 
for purposes of article XX(b). 
33. Therefore, Mexico requests the Panel to consider the potential systemic risk that this type of 
reasoning might pose. 
VII. THE PANEL SHOULD REFRAIN FROM EXERCISING JUDICIAL ECONOMY IN 
THIS DISPUTE 
34. Finally, in order to secure a positive solution to  this dispute, Mexico requests the panel to 
consider carefully whether the exercise of judi cial economy could pose a risk to securing a positive 
solution to this dispute.  
VIII.  CONCLUSION 
35. For the reasons set forth, Mexico requests th is Panel to reject China's arguments and 
suggested interpretations, as they pose a ser ious risk to the WTO trading system.  
36. Mexico insists that every Member of the WTO must comply with its obligations in good faith, 
and adjust its development policies to those rules,  instead of trying to adjust those rules, through 
overly expansive interpretations of its exceptions, to  its development policies, to the detriment of a 
rules based system. The Panel should not forget th at the measures at issu e are designed to serve 
China's economic advancement goals at th e expense of the rest of the World.  
 WT/DS394/R/Add.1 
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Page C-24 
  
  ANNEX C-6 
 
CLOSING ORAL STATEMENT OF MEXICO AT THE  
SECOND SUBSTANTIVE MEETING 
  
1. Mr. Chairman and members of the Panel. 
2. Mexico is here today as a co-complainant b ecause the WTO inconsistent export restraints 
imposed by China not only are harmful for its re levant industries today, but also because China's 
economic advancement policy, based on those WTO inconsistent export restraints, represents a 
serious threat to their ex istence in the future.   
3. Mexico has also systemic concerns that s hould be taken into account. China has presented 
defenses in this case that raise substantial syst emic concerns for the WTO trading system. By 
distorting different legal standards of the law go verning this dispute, China is attempting to 
accommodate the WTO Covered Agreements and its  acceding commitments to its own economic 
interests. This Panel simply cannot side with China.  
4. The systemic concerns raised in this dispute are the direct consequence of a defense designed 
to adjust the rules to China's economic advancem ent policies –based on the production of high value 
added downstream products- , and not the policies to the rules.  
5. In its opening statement, Mexico enlisted some of  the systemic negative implications that may 
arise if the Panel decides to si de with China in this case.  
6. For example, Mexico explained why the Pa nel shall make recommendations on the 2009 
Measures. Under Art 19.1 of the DSU, Panels "… shall recommend that the Member concerned bring 
the measure into conformity…"  when it finds a WTO violation. It is not a discretion but an obligation 
for this panel to make such recommendations if it finds the 2009 measures WTO inconsistent.  Unlike 
in this dispute, in US - Certain Products the measure at issue was termin ated before the panel request 
was filed and before the DSB established the pa nel, fixing the panel's terms of reference. 
7. Mexico also explained the Panel the negative imp lications that the interpretations offered by 
China will bring to the terms "temporarily applie d", "critical shortage" and "essential" in GATT 
article XI:2(a), the term "made effective in conj unction with restrictions on domestic production or 
consumption" in GATT article XX(g), the term "necessary" in GATT article XX(b), and the term 
"nothing in this Agreement" in the Chapeau of  GATT article XX. Those terms do mean something 
and cannot be interpreted so broa dly so as to be rendered null.  
8. Not only China's interpretations go against the text of the GATT 1994, but also they go 
against previous Panel and Appellate Body Decisions  unless, of course, they are taken out of context 
and misinterpreted. 
9. For example, the Appellate Body in Korea — Various Measures on Beef , explained that the 
term "necessary" contained in article GATT XX(b): "refers to a range of degrees of necessity. At one 
end of this continuum lies 'necessary' understood as 'indispensable'; at the other end, 'necessary' 
taken to mean as 'making a contribution to'. The Appellate Body then explained that " a 'necessary' 
measure is, in this continuum, located significantly closer to the pole of 'indispensable' than to the 
opposite pole of simply 'making a contribution to'".  China's offered interpre tation goes against this 
decision of the Appellate Body.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 Page C-25 
  
  10. Also, the Appellate Body in US – Gasoline , explained that the term "made effective in 
conjunction with restrictions on do mestic production or consumption"  in GATT article XX(g)  is "a 
requirement of evenhandedness in the imposition of rest rictions, in the name of conservation, upon 
the production or consumption of  exhaustible natural resources." Again, China's offered 
interpretation goes against the Appellate Body's inte rpretation of the existence of a requirement of 
evenhandedness. 
11. Once again, Mexico would like to request th is Panel to reject China's arguments and 
suggested interpretations.  
12. China is not the only WTO Member trying to  seek the adequate policies that will ensure 
economic advancement in a short and long term. Every WTO Member wants economic growth, and 
developing the adequate policies is not an easy task . For any WTO Member, this task requires to take 
into account its WTO obligations and adjust those policies to the rules, and not to adjust the 
interpretation of those already ag reed rules to those policies. 
13. Mr. Chairman, finally, Mexico would only like to  thank you, the other Members of the Panel, 
and the Members of the WTO secretariat, for your time during this hearing.   
 
 
_______________ 
  
  WT/DS394/R/Add.1 
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 Page D-1 
  
  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 opening or al statement of China at the first 
substantive meeting D-12 
D-3 Executive summary of the closing or al statement by China 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 or al statement by China at the second 
substantive meeting D-40 
 WT/DS394/R/Add.1 
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Page D-2 
  
  ANNEX D-1 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF CHINA 
 
I. TERMS OF REFERENCE 
1. The first written submissions of the Complainants aggravate problems concerning the Panel's 
terms of reference. First , just two of the fifteen  measures relating to the alleged minimum export price 
("MEP") requirement can appropriate ly be considered within the Panel's terms of reference.  Second , 
the Complainants continue to fail to present the problems in Section III of the Panel requests clearly, 
as there remain no concrete linkag es between the measures at issue, the products they concern and the 
treaty provisions with which the measur es are alleged to be inconsistent. Third , the European Union 
makes an argument relating to an alleged failure  to publish the export quota on coke in its FWS, 
which was not mentioned in its Panel request. Fourth , the Complainants challenge several expired 
measures that should also be considered outside the Panel's te rms of reference. Finally , the 
Complainants fail to seek sufficiently precise recomm endations and rulings in respect of their claims 
in Section III of the Panel requests.  
II. THE PRODUCTS AT ISSUE 
2. Descriptions of the products at issue are in cluded in Exhibits CHN-9, CHN-10, CHN-11, and 
CHN-12. 
III. THE EXPORT DUTIES ALLEGEDLY INCONSISTENT WITH PARA. 11.3 OF THE 
ACCESSION PROTOCOL  
3. The Complainants allege that the China violates Paragraph 11.3 of the Accession Protocol  by: 
(i) imposing temporary duties on exports of baux ite, coke, fluorspar, magn esium, manganese, silicon 
metal, and zinc, which are not  listed in Annex 6 to the Accession Protocol ; and, (ii) subjecting exports 
of yellow phosphorus to a duty in excess of the ad valorem  rate listed for item No. 11 in Annex 6 to 
the Accession Protocol .  The European Union further claims that China has violated the obligation 
assumed under the note to Annex 6 to consult "w ith other affected WTO Members prior to the 
imposition" of the export duties on bauxite, coke, fluorspar, magnesium, manganese, silicon metal, 
and certain forms of zinc. 
4. Before justifying the export duties pursuant to the GATT 1994, China recalls its concern that 
certain claims pertaining to export duties fall outside the Panel's terms of reference.  First , the claims 
are based on the 2009 Tariff Implementation Plan , and other measures that have now expired or have 
been repealed. The Panel cannot make recommenda tions with respect to the repealed 2009 export 
duties. Second , as of 1 January 2010, China no longer subjects exports of bauxite to duties.  Third , 
China does not impose an export duty on yellow phos phorus in excess of the rate specified in 
Annex 6. The Tariff Commission repealed the special  export duty applicable to yellow phosphorus, as 
of 1 July 2009, prior to the Complainants' Panel requests.  Under the 2010  Tariff Implementation 
Plan , consistent with Annex 6, exports  of yellow phosphorus are subject solely to the regular duty rate 
of 20 per cent.   
5. In addition, China acknowledges, as asserted by the European Union, that it failed, under the 
note to Annex 6 to the Accession Protocol , to consult "with other affected WTO Members prior to the 
imposition" of the export duties imposed on bauxite , coke, fluorspar, magnesium, manganese, silicon 
metal, and certain forms of zinc.  WT/DS394/R/Add.1 
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 Page D-3 
  
  IV. THE EXPORT DUTIES APPLIED TO EXPORTS OF FLUORSPAR, COKE, 
MAGNESIUM, MANGANESE, AND CERTAIN FORMS OF ZINC ARE JUSTIFIED PURSUANT TO THE GATT 1994 
A. T
HE EXPORT DUTY APPLIED TO FLUORSP AR IS JUSTIFIED PURSUANT TO ARTICLE XX( G) OF 
THE GATT 1994 
6. The export duty of 15 per cent applied to fluo rspar is justified pursuant to Article XX(g) 
because it is a measure relating to the conservation of an exhaustible non-rene wable mineral resource, 
and is applied together with restricti ons on domestic productio n and consumption. 
1. Interpretation of Article XX(g) of the GATT 1994 
7. Under Article XX(g), Members taking conservation- related measures to restrict the supply of 
a mineral resource must ensure that restrictions are imposed on domestic supply. Thus, Article XX(g) 
ensures that the burden of conservation-related meas ures is not imposed solely on foreign trade, but 
applies also to domestic trade.  Article XX(g) mu st be interpreted in a manner that recognizes WTO 
Members' sovereign rights over their own natural res ources. Pursuant to this well-recognized principle 
of international law, resource-endowed countries may manage the supply and use of their natural 
resources through conservation-related measures that foster the sustainable development of their own 
peoples. These rights must be exercised in the interests of a Member's own social and economic 
development. Provided that restrictions are im posed 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 th e exploitation of their resources.   
2. Application of Article XX(g) to the export duty imposed on fluorspar 
8. Fluorspar is a non-renewable mineral with fin ite natural reserves that are susceptible to 
depletion, in quantity and quality, mostly as a result of  human activity.  It is a natural resource in high 
demand for a variety of industrial applications.  Given the importance of fluorspar to China's 
economy, and given that China's reserves of this resource are limited, it has adopted a variety of 
measures that manage the supply and use of fluorspar  over time.  The need to  do so is clear:  while 
China's reserves of fluorspar constitute just ni ne per cent of estimated world resources, China 
accounts for almost two-thirds of world productio n.  These measures ensure that this resource 
provides social and economic benefits over a longer pe riod than would otherwise be the case; they are 
also an integral part of China's sustainable minerals  policy to rely mainly on its own mineral resources 
to develop its economy.  China's coherent policy includes elements such as a mineral resources tax 
and compensation fee, environmental standards, caps on extraction and initial processing, and an 
export duty.  In particular, the extraction and pr ocessing caps manage the supply and use of fluorspar 
over time, by restricting the volume of fluorspar ore that may be taken from the ground, and also by 
restricting the volume of basic tradable fluorspar that may be produced. 
9. There would be no point in China authorizin g the limited extraction of fluorspar, in the 
exercise of its sovereign rights, if the benefits de rived from China's use of the extracted resource were 
not optimized.  Thus, measures balancing the maintenance  and use of fluorspar resources, through 
effective supply management , are essential to ensuring China's op timal use over time of the available 
quantity of the resource. Such measures must be developed in tandem.  From the perspective of 
Article XX(g), all of these measures aim at contro lling supply and managing the use of the resource 
over time;  that is, conserving  the resource.  Without 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. WT/DS394/R/Add.1 
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Page D-4 
  
  10. Having established that the export duty on fluor spar is provisionally justified pursuant to 
Article XX(g), China also establishes that the export duty complies with the chapeau  of Article XX.     
B. T
HE EXPORT DUTIES APPLIED 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 
11. China raises a defence under Article  XX(b) to claims against export duties applied to: (i) zinc, 
magnesium metal, and manganese metal scrap, or "non -ferrous metal scrap products"; and, (ii) coke, 
magnesium metal and manganese metal, or EPR products.   
1. Interpretation of Article XX(b) of the GATT 1994 
12. Article XX(b) protects WTO Members' inherent right to regulate, inter alia , for the purpose 
of protecting human, animal or plant life or hea lth. Panels and the Appella te Body have shown a 
degree of deference to a WTO Member's policy desi gned to "protect human, animal or plant life or 
health".  In particular, Article XX(b) requires that  the respondent's measure be "necessary" to achieve 
the stated objective. Assessing the "necessity" of a m easure 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 
the measure's objective; and, (iii) th e trade restrictiveness of the measure. 
13. A measure can contribute to the stated objective in different ways, i.e., (i) the measure can 
bring about a material contribution to the achievement  of its objective;  and, (ii) the measure can be 
apt to produce a material contribution to the obj ective pursued, even if the contribution is not 
"immediately observable". 
14. In assessing the "necessary" character of a measure, the Appellate Body in Brazil – Retreaded 
Tyres  stressed that a panel may consider that " certain complex public health or environmental 
problems may be tackled only with a comprehensiv e policy comprising a multiplicity of interacting 
measures". With respect to such complex policies, the Appellate Body in Brazil – Retreaded Tyres  
found that a "necessary" measure could contribute, in the short- or long-term, to one of the objectives 
protected in Article XX(b), as part of a policy fra mework comprising different measures, resulting in 
possible synergies between those measures. 
2. Application of Article XX(b) to the export duties applied to non-ferrous metal scrap of 
zinc, magnesium metal, and manganese meta l, and to coke, magnesium metal, and 
manganese metal 
15. China has adopted a comprehensive strategy fo r reducing risks to human, animal, and plant 
life and health resulting, directly or indirectly, from the high energy-consuming and polluting production of non-ferrous metals and other EPR products, or "hea lth risks relating to metals 
production". This strategy is a core component of China's environmental policy, which has three key 
objectives, namely: (i) pollution reduction; (ii) ener gy conservation; and, (iii) transformation into a 
"circular economy", or "recycle economy".  The key te nets of this policy are described in detail in 
Annex A to China's first written submission. 
16. China identifies, in Annex B to its first writte n submission, the health risks related to the 
production, from crude ores, of magnesium, manganese,  and zinc, due to high levels of pollution and 
energy intensity connected with that production.  The production of ferrous  and non-ferrous metals 
using recycled scrap, or so-called "secondary pro duction", is significantly less polluting and more  WT/DS394/R/Add.1 
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 Page D-5 
  
  energy efficient, thereby reducing risks related to non-ferrous metals produc tion using crude ores.  
Secondary production from scrap me tal consumes a fraction of the energy required for primary 
products, produces less noxious off-gases duri ng the production processes, and reduces pollution 
relating to waste disposal once consumer produc ts have reached the end of their lives. 
17. The non-ferrous metal scrap produc ts make a present material contribution, and are apt to 
contribute to the reduction of health risks relate d to metal production by: (i) in the short-term, 
reducing the level of pollution and energy intensit y 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 recycling technologies,  and thus, a more sustainable secondary production 
of non-ferrous metals.   
18. For China to achieve its objective of succes sful substitution of secondary production for 
primary production, it must control and manage its limited scrap resources. Export restraints on the 
products at issue are necessary to avoid domestic suppl y bottlenecks, and to ensure that scrap metal is 
retained in the domestic reprocessing cycle. Evid ence presented by China supports the conclusion that 
export duties applied to the non-ferrous metal scrap pr oducts at issue make a material contribution to 
the objective of reducing risks to human, animal, and plant life or health.   
19. The export duties applied to the non-ferrous scrap  products, provisionally justified pursuant to 
sub-paragraph (b), satisfy the requirements of the chapeau  of Article XX.   
C. T
HE EXPORT DUTIES APPLIED TO COKE , MAGNESIUM METAL , AND MANGANESE METAL ARE 
JUSTIFIED PURSUANT TO ARTICLE XX( B) OF THE GATT 1994 
20. The export duties applied to coke, magnesium  metal, and manganese metal are justified 
pursuant to Article XX(b) because they are necessar y for the protection of human, animal, and plant 
life or health by virtue of their contribution to the reduction of the polluting and energy-intensive 
production of coke, magnesium me tal, and manganese metal. 
21. The production of coke, magnesium metal, and manganese metal is harmful to human, 
animal, and plant life and health, due to high leve ls of pollution emission and energy-use.  Most 
countries, including the Complainants, have chosen not to extract and produce sufficient quantities.  
Coke, magnesium metal and manganese metal are by a ll standards "dirty" products.  For a long time, 
the worldwide production of EPR products operated to  a large extent unregulated.  That has changed 
significantly over the past three decad es, such that strict environmen tal standards, especially in the 
European Union and the United States, have imposed considerable costs on industrial and mining 
activity in the industrialized world, which have, as a result, experienced a steady decline. Basic 
industrial producers in the European Union a nd the United States began to specialize in 
"sophisticated" goods that are high-tech, high value- added, and, importantly, less polluting than basic 
materials, minerals, and metals. Manufacturing these sophisticated products requires considerable 
amounts of basic materials, minerals, and metals .  Heightened reliance by the Complainants on 
imports of these "dirty" products does not require China to be the source of first resort. The 
economies of many developed countries have the full technical capacity to produce these "dirty" products in their own domestic markets and in a fa r less polluting manner than China, as explained in 
Exhibit CHN-12. 
22. The export duties on coke, magnesium metal, a nd manganese metal are an integral part of 
China's comprehensive environmental policy aimed at reducing the health risks related to the 
production of these products. China currently is in  a transition phase, from an export-driven economy 
focused largely on rapid industrialization and gr owth led by exports of basic materials and WT/DS394/R/Add.1 
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Page D-6 
  
  unsophisticated low-tech goods, to an economy that  develops at a scale and pace that is 
environmentally, socially, and economically sustai nable. The export duties at issue bring about a 
present material contribution to the objective of reducing the health risks resulting from the high 
levels of pollution and energy use connected w ith the production of coke, magnesium metal, and 
manganese metal. Under normal economic conditions, export duti es reduce foreign demand, and 
therewith exports. This, in turn, decreases overall production. For heavily-polluting products, this 
immediately leads to important reductions in air,  water, and soil pollution. The export duties signal 
Chinese manufacturers to slow down production and to  lower output to sustainable levels.  In 
industries characterized by slack responses to pric e changes, such a credible signal has a more 
immediate effect on producers and manufacturers than  changes in market prices. Unrestrained exports 
would result in levels of production in China whic h exacerbate the very pollution effects China has 
determined are dangerous to human, animal, plant life and health. Export duties are an intervention 
tool that effectively addresses "production leakage" an d the overproduction it entails, fully in line with 
Article XX(b). The export duties al so are apt to make a material contribution to the reduction of 
health risks that result from high levels of pollution  and energy use connected with the production of 
coke, magnesium metal, and manganese metal. These export duties are a WTO-consistent and 
efficient tool to speed up industry restructuring.   
23. The export duties applied to coke, magnesium  metal, and manganese metal, provisionally 
justified pursuant to sub-paragraph (b ), satisfy the requirements of the chapeau  of Article XX.   
V. THE EXPORT QUOTAS ALLEGEDLY INCO NSISTENT WITH ARTICLE XI:1 OF 
THE GATT 1994 AND PARAGRAPHS 162 AND 165 OF THE WORKING PARTY 
REPORT 
A. T
HE COMPLAINANTS ' FAILURE TO MAKE A PRIMA FACIE  CASE THAT THE EXPORT QUOTAS ARE 
INCONSISTENT WITH ARTICLE XI OF THE GATT 1994 
24. The Complainants allege that China's export quotas applied to refractory-grade bauxite, 
aluminium ores and concentrates, coke, fluorspar, s ilicon carbide, and zinc ores and concentrates are 
quantitative restrictions under Article XI:1.   
25. The Complainants have not established a vi olation of Article XI, for two reasons.  First , the 
European Union has not identified the measure s allegedly imposing e xport quotas on bauxite, 
aluminium ores and concentrates, fluorspar, silicon ca rbide, and zinc ores and concentrates, and that 
are the subject of its Article XI:1 claims. Where the specific measures challenged are not identified, 
neither the Panel nor the DSB can make suffici ently precise recommendations under Article 19.1 of 
the DSU.  Second , the chapeau to Article X1:2 states that the obligation in Article XI:1 shall "not 
extend to" types of export restrictions listed in Articles XI:2(a)-(c). The potential application of 
Article XI:2(a) of the GATT 1994 is clear, especially  in light of the arguments raised by the 
Complainants in their first written submission, a nd the steps they have taken to secure access to 
supply-restricted products that they deem essential to the functioning of their own economies .   
26. To the extent that the Panel finds the export q uotas to be inconsistent with Article XI:1 and 
not justified under Articles XX(g) and/or XX(b), China asks the Panel to exercise judicial economy with respect to the Complainants ' claims under paragraphs 162 and 165 Working Party Report , which 
solely confirm, and are duplicative of, the obligation assumed under Article XI:1.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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  B. A
RTICLE XI:1  OF THE GATT 1994  DOES NOT APPLY TO THE EXPORT QUOTA APPLIED TO 
REFRACTORY -GRADE BAUXITE , BY VIRTUE OF ARTICLE XI:2( A) 
1. Interpretation of Article XI:2(a) of the GATT 1994 
27. Article XI:2(a) removes from the scope of Article XI:1 those export prohibitions or 
restrictions that, inter alia , are limited in application to the peri od of time required to remedy or avoid 
a situation in which the supply of a product that is  important to the economic vitality of a Member is 
constrained to a degree that imperils the ability of that product to serve the purpose that gives it its 
importance.  The Complainants have interpreted Articles XI:1 and XI:2(a) to permit, for periods 
exceeding 30-40 years, the maintenance of export pr ohibitions and restrictions  on products that they 
deem essential for downstream domestic industries, and for which supply is or has the potential to be 
restricted, by virtue of strong foreign demand, ph ysical exhaustibility, and/or domestic regulatory 
limits on access.  These examples are compelling,  as they reflect views concerning the proper 
interpretation of Articles XI:1 and XI:2(a) expressed outside  the context of this litigation. 
2. The export quota on refractory-grade bauxit e is temporarily applied to prevent or 
relieve a critical shortage of this essential product 
28. Refractory-grade bauxite is a product essential to  China because it is indispensable for the 
production of iron and steel, and of other products such as glass, ceramics, and cement. While bauxite 
is a widely-occurring mineral, most deposits of baux ite available globally are insufficient for use as a 
refractory-grade product.  China's bauxite reser ves, however, are principally of high quality 
refractory-grade bauxite. 
29. Consistent with the interpretati on of the term "essential", mine rals economists have developed 
methodologies to measure both the importance in use  of a given product to an economy, and the 
supply constraints  that put a brake on the ability of an econom y to enjoy that use.  Such "criticality 
assessments" help assess appropriate policy solutions  to ensure access to scarce and exhaustible raw 
materials. Building on these standard criteria, Ch ina submits similar evidence in Exhibit CHN-10, 
which assesses the criticality of refractor y-grade bauxite to China.     
30. China imposes an export quota on refractory-grad e bauxite to prevent or relieve a critical 
shortage.  Measuring "shortage" requires comparing anticipated future demand, in light of the 
importance in use of the product, with future supply, in light of, inter alia , geological, commercial, 
and regulatory constraints.  At current reserve and production rates, this comparison suggests a 16-
year reserve life for China's refractory-grade bauxite.  The very short remaining life span of this 
essential and exhaustible natural res ource demonstrates the occurrence or risk of a critical shortage. 
Apart from the risk of a physical shortage, other constraints may disrupt the flow of a material through the value chain, including: (i) conservati on measures to manage China's raw materials in a 
sustainable manner so as to ensure their long-te rm availability and benefits; (ii) the regulatory 
framework governing the industries that extract and process the product; (iii) the development and use 
of technologies aimed at efficient extraction and production, exploration of mineral resources, 
recovery of minerals, and mainte nance of existing mining and processing industries; (iv) local or 
regional communities' acceptance of mining; (v) ot her WTO Members' appetite for China's refractory-
grade bauxite; and, (vi) the difficulty experienced  in the exploitation of  reserves of high-quality 
bauxite with refractory characteristics elsewhere outside  China.  As part of China's effort to manage 
constrained supply and to prevent or relieve a criti cal shortage, which would deny it sufficient supply 
of this essential product, China applies a quota to  exports of refractory-grade bauxite. Absent any 
export restriction, China's severely constrained s upply of refractory-grade bauxite would be further 
diminished.   WT/DS394/R/Add.1 
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  31. The export quota applied to bauxite is also a pplied temporarily, as evidenced by: (i) the 
annual publication of the Export License Catalogue ; (ii) the annual determination of the amount of the 
quota, evidenced by a methodology paper submitted as Exhibit CHN-283; and, (iii) the biannual 
publication of notices announcing the specific bidding ru les for each batch of bauxite. The adoption of 
these measures demonstrates that the quota is reviewed and assessed on an annual basis.   
C. T
HE EXPORT QUOTA APPLIED TO REFRACTORY GRADE BAUXITE IS JUSTIFIED PURSUANT TO 
ARTICLE XX( G) OF THE GATT 1994 
32. In the event that the Panel finds that the export quota on refractory-grade bauxite is 
inconsistent with Article XI:1, China demonstrates  that the export quota is justified pursuant to 
Article XX(g).  At paragraph 7, China su mmarized its interpretation of Article XX(g). 
33. Refractory-grade bauxite is an exhaustible na tural resource with qualities that make it 
essential to the production of, inter alia , iron and steel. China has already explained the importance in 
use of Chinese refractory-grade bauxite for produc ing iron and steel, etc., thereby contributing to 
China's economic and social development. For these reasons, China must conserve its own refractory-
grade bauxite to enable the unique benefits of th is natural resource to be preserved and enjoyed for 
future generations. As a result, China has adopted  a comprehensive conservation policy for refractory-
grade bauxite, comprising closely intertwined measures. Through these measures, China promotes the sustainable use and husbanding of its refractory-grad e bauxite resources by restricting or burdening 
the current exploitation, production, and use of its own refractory-grade bauxite resources, thus 
ensuring that future generations can also enjoy the social and economic benefits resulting from the 
industrial applications of refractory-grade bauxite.   
34. China has subjected the extraction and processi ng of refractory-grade bauxite to quantitative 
caps, imposing limits on the volumes of the product th at are available for u se. These measures, along 
with other burdens imposed on extraction and pr ocessing, form an integral part of China's 
conservation policy for refractory-grade bauxite. China, thus, conserves its own resources of 
refractory-grade bauxite through a comprehens ive policy aimed at balancing preservation of 
refractory-grade bauxite against its use. The quota app lied to exports of refractory-grade bauxite is an 
integral part of that policy.   
35. The export quota on refractory-grade bauxite, provisionally justified pursuant to 
Article XX(g), complies with the chapeau  of Article XX.  
D. T
HE EXPORT QUOTAS APPLIED TO COKE AND SI LICON CARBIDE ARE JUSTIFIED PURSUANT TO 
ARTICLE XX( B) OF THE GATT 1994 
36. The export quotas applied to coke and silicon car bide are justified pursuant to Article XX(b) 
because they are necessary to redu ce health risks resulting from the high levels of pollution and 
energy-use in connection with the production of both products. The export quotas at issue make a 
material contribution to the reduction of health ri sks resulting from high levels of pollution and energy 
use connected with the production of both prod ucts. At Exhibit CHN-124 and CHN-147, China 
estimates the effects of the export quotas on coke and silicon carbide on the domestic production in 
China. This evidence demonstrat es that a significant decrease of air pollutants resulting from export 
quotas on coke and silicon carbide contributes to an improvement in air quality across China and, in 
particular, in the densely-populated areas surrounding  the manufacturing plants. In addition to the 
immediate  beneficial effects on human, animal, and plan t life or health, China's export quotas are apt 
to make a material contribution to the reduction of health risks resulting from high levels of pollution 
and energy use connected with the produc tion of both products. If China were to eliminate  the export  WT/DS394/R/Add.1 
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  quotas on coke and silicon carbide, this w ould seriously impact the efficacy of other important 
measures, geared at sustainably reducing pollution in th ese two industries, thus jeopardizing China's 
long-term environmental strategy as a whole.   
37. The export quotas applied to coke and silicon car bide, provisionally justified pursuant to sub-
paragraph (b), satisfy the requirements of the chapeau  of Article XX.  
E. T
HE EXPORT QUOTA ON ZINC ORES AND CONCENTR ATES HAS NOT BEEN MADE EFFECTIVE FOR 
EXPORTS IN 2010 
38. China has not made effective the export quota for zinc ores and concentrates in 2010. 
F. THE PANEL SHOULD EXERCISE JUDICIAL ECONOMY WITH RESPECT TO THE CLAIMS UNDER 
PARAGRAPHS 162 AND 165 OF THE WORKING PARTY REPORT  PERTAINING TO THE EXPORT 
QUOTAS APPLIED TO BAUXITE , COKE , SILICON CARBIDE , AND ZINC ORES AND CONCENTRATES  
39. If the Panel does not accept the consistency with  or justification of the export quotas pursuant 
to the GATT 1994, China asks the Panel to restrict its analysis to findings that the export quotas are 
inconsistent with Article XI:1, and to exercise j udicial economy with respec t to the same claim under 
paragraphs 162 and 165 Working Party Report .  The obligation to eliminate export restrictions, 
assumed by China under Paras. 162 and 165, merely  confirms the obligation assumed by all WTO 
Members under Article XI:1.   
VI. THE ADMINISTRATION OF CHINA'S WTO-CONSISTENT EXPORT QUOTAS 
A. THE BID -WINNING PRICE FALLS OUTSIDE THE SCOPE OF THE OBLIGATION ASSUMED UNDER 
ARTICLE VIII:1( A) GATT 1994  AND PARA. 11.3  ACCESSION PROTOCOL  
40. The Panel should reject claims that the bid-winning  price is inconsistent with Article VIII:1(a) 
and Para. 11.3 Accession Protocol . Article VIII:1(a) does not include a residual general prohibition  
on all fees and charges.  The words used in Article  VIII, in light of the surrounding circumstances, 
demonstrate that this provision relates to fees and formalities in connection with the processing of 
customs entries .  Allocation of a quota th rough bidding is not a step in the process of customs 
clearance and transit. The bidding process takes place at a much earlier point in time, even before 
exporters have made any bindi ng commitments to export .   
41. Moreover, a Member's chosen method of alloca ting a WTO-consistent quota is part of the 
administration  of that quota, subject, therefore, to the provisions of the GATT 1994 that discipline a 
Member's administration of its quotas and other measu res of general application.  In Exhibit CHN-
306, China demonstrates that quota auctions have no effect on the total amount exported, or on the 
final export price.  A quota-winning bid does not restrict trade flows over and above the initial quota volume that the auction is designed to allocate.   
42. Finally, the bid-winning price is not a "tax" or "charge" "applied to exports";  thus, 
paragraph 11.3 does not apply. 
B. C
LAIMS PERTAINING TO THE ELIGIBILITY OF AN EXPORTER FOR QUOTA ALLOCATION  
43. The minimum export performance and capital requirements are eligibility criteria for 
allocating WTO-consistent export qu otas applied to bauxite, coke, a nd silicon carbide. So long as 
China complies with all WTO disciplines governing the administration of a WTO-consistent quota WT/DS394/R/Add.1 
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  with respect to these eligibility cr iteria, China does not restrict trading rights in a manner prohibited 
by paragraph 5.1 of the Accession Protocol , and paragraphs 83 and 84 of the Working Party Report . 
Also, the European Union has not establish ed its claim under paragraph 5.2 of the Accession Protocol  
and paragraphs 84(a)  and 84(b) of the Working Party Report , with respect to its assertion that "foreign 
enterprises are more likely to be new applican ts for export quotas than Chinese companies". 
44. The "operation capacity" of the applicant is its capacity to undertake commodity exports, or in 
other words, the operational ability of the appli cant 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 ab ility to execute exports, before allo cating it part of the quota. Such a 
criterion ensures quota fill, and avoids wasting the quota on applicants who cannot achieve quota fill.  
Moreover, the European Union points to no evid ence concerning the application of the "operation 
capacity" requirement. It does not state a claim concerning the administration of the measure that is cognizable under Article X:3(a). 
45. With respect to the CCCMC involvement in the administration of export quota allocation, 
Mexico and the United States have offered an im proper legal characterization of the facts. The 
CCCMC Secretariat, and not CCCMC members, are invo lved in the administra tive process leading to 
quota allocation. Even were the involvement of the C CCMC Secretariat to present an inherent risk of 
impartial and unreasonable administration, effective safeguards are in place to prevent or remedy the 
risks of conflict of interest described by Mexico and the United States. 
C. CLAIMS PERTAINING TO TH E PUBLICATION OF QUOTAS  
46. With respect to the quota on certain zinc pr oducts, the MOFCOM has not authorized any 
quota for zinc for 2010.  Accordingly, China has not  omitted to publish the quota for zinc, and rules 
governing its allocation, under Article X:1.   
47. With respect to the publication of the quota for coke, the EU has neglected to include this 
matter in its Panel request.  In any event, Chin a has published on time the amount of the quota for 
coke. 
VII. CHINA'S AUTOMATIC EXPORT LICENSE REQUIREMENT AND ITS 
ADMINISTRATION 
48. WTO Members have the right to decide how to regulate goods, provided they exercise that 
right in a manner consistent with their WTO obliga tions.  Pursuant to Article XI:1, in regulating 
imports and exports, Members cannot restrict the quantity  of imports or exports. As a result, a claim 
under Article XI:1 requires proof that an otherw ise permissible regulati on has an impermissible 
"limiting effect " on the quantity  of imports or exports. An import or export license issued 
automatically , that is, in all cases, has no limiting effect on the quantity of exports , and is instead 
permissible regulation.  Indeed, WTO Members recognize in the Import Licensing Agreement  that 
automatic licensing is not only permissible, but  affirmatively useful for certain purposes. 
49. China's export license requirement is auto matic, because, under Chinese law, an export 
license is automatically granted within three days of submitting an applicati on, provided a valid and 
complete set of documents is submitted with the a pplication – and irrespective of whether exports of 
the product are subject to a quota.  As a result,  the export license requirement does not limit the 
quantity of exports of bauxite, coke, manganese,  silicon carbide, and zinc, and does not violate 
Article XI:1.  WT/DS394/R/Add.1 
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  50. To the extent the Panel finds China's export license requirement to be inconsistent with 
Article XI:1, China requests that the Panel ex ercise judicial economy with respect to the 
Complainants' claims under Para. 5.1 Accession Protocol , and paragraphs 83(d), 84(a), 84(b), 162, 
and 165 of the Working Party Report . 
51. Consistent with Article X:1, China has published the list of documents that must be submitted 
to obtain an export license, and the definiti on and method of verification of the "business 
qualification" of an applicant. 
52. Finally, the Panel must reject the European Union's Article X:3(a) claim relating to the 
administration of China's export licensing system, alleging "based on a nexus of ... vague and opaque 
provisions and requirements", because the European Union provided neither interpretative argument 
nor evidence. 
VIII.  CHINA'S ALLEGED MEP REQUIREMENT AND ITS ADMINISTRATION 
53. Leaving aside terms of reference issues, the Complainants' factual assertions regarding the 
alleged MEP requirement are incorrect, because China no longer operates an export price 
coordination system . The Complainants have failed to establis h that: (i) following the repeal of export 
price coordination, China continued to impose an d enforce an MEP; (ii) no exports of yellow 
phosphorus and bauxite occurred below the allege d coordinated prices; and, (iii) the alleged 
requirement constitutes a restricti on on exportation under Article XI:1. 
54. The Panel should not make findings regarding the claim that the administration of the MEP 
requirement through the chop system violates Article X:3(a), because the chop system was – as the 
Complainants recognize – formally repealed in May 2008, long before this dispute commenced.  As a 
result, there no longer exists any MEP to admini ster.  In any event, the Panel cannot make 
recommendations regarding the administration of measures that have ceased to exist. 
55. Apart from those alleged MEP-related measures th at no longer apply or have been formally 
repealed and therefore require no publication pursu ant to Article X:1, China has published the 2010 
CCCMC Charter. 
 WT/DS394/R/Add.1 
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  ANNEX D-2 
 
EXECUTIVE SUMMARY OF THE OPENIN G ORAL STATEMENT BY CHINA  
AT THE FIRST SUBSTANTIVE MEETING 
 
I. INTRODUCTION 
1. In Section II, China provides an update on th e status of certain measures concerning the 
alleged MEP, requirement, as it relates to Chin a's arguments concerning the Panel's terms of 
reference.  In Sections III and IV, China places the matters at issue in a br oader public international 
law context, and demonstrates that this relevant c ontext confirms China's interpretation of Articles XI 
and XX GATT 1994.  In Section V, China responds to specific questions raised by the third parties concerning Article XI:2(a) GATT 1994.  Finally, in  Section VI, China addresses the availability of 
Article XX in defense of clai ms under Paragraph 11.3 of the Accession Protocol .   
II. TERMS OF REFERENCE – MEP MEASURES 
2. China objects to the inclusion in the Panel's terms of reference of all but two measures related 
to China's alleged MEP requirement, because these measures were not included in the Complainants' 
Panel Requests and/or Consultation Requests. At pa ragraph 39 of its first written submission, China 
listed these measures in Table 1. Many of the measur es listed in Table 1 have also expired, or were 
superseded or formally repealed.  For the avoi dance of doubt, on 16 August 2010, MOFCOM and the 
General Administration of Customs formally repealed  two of the measures listed in Table 1, namely: 
(i) the 1997 Circular on Printing and Circulating Relevant  Provisions regarding Price Review of 
Export Commodities by the Customs , including its annexes (also not listed in the Consultation 
Requests); (ii) the  2002 Circular on the Adjustment of the Ca talogue of Export Commodities Subject 
to Price Review by the Customs (also not listed in the Panel Requ ests). Making findings with respect 
to these, and other, expired measure s serves no purpose, even assuming, quod non , that they fall 
within the Panel's terms of refe rence.  Moreover, the Panel may not make recommendations regarding 
these measures. 
III. THE SOVEREIGN RIGHT OF A WTO MEMBER TO EXPLOIT ITS NATURAL 
RESOURCES TO ACHIEVE SUST AINABLE DEVELOPMENT THROUGH 
ECONOMIC DIVERSIFICATION 
3. What is fundamentally at stake in these disputes is the sovereign right of  a developing country 
Member of the WTO to chart a course, over tim e, towards sustainable development through the 
exploitation of its natural resources. Consistent w ith international law, the WTO covered agreements 
allow a Member to use a range of policy tools, in cluding export policy, to pursue these objectives, 
with the ultimate goal of enabling its sovereign natural resource endowment to deliver development 
that is sustainable. Indeed, the principle of sovereignty over natural r esources; the objective of 
sustainable development; and, the objective of economic diversification beyond trade in raw 
materials, set forth in Article XXXVI:5 GATT 1994, support China's interpretation of Articles XI and 
XX GATT 1994. 
4. First , pursuant to the customary international nor m of permanent sovereignty over natural 
resources, a State has the inherent right "freely to use and exploit their natural wealth and resources 
wherever deemed desirable by them for thei r own progress and economic development", as 
recognized in U.N. G.A. Resolution 626 (VII). WT O Members have accepted the relevance of this 
customary norm to WTO disciplines. Notably, the Complainants have expressed their view that the 
principle is fully compatible with, and indeed an inherent part of, WTO disciplines.  In accordance  WT/DS394/R/Add.1 
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  with Article 31(3)(c) VCLT, the customary norm of sovereignty over natural resources is a relevant 
rule of international law, applicable to all Stat es, to be taken into account  in interpreting the WTO 
covered agreements. 
5. Second , it is well-established in international law th at a State's sovereign right to exploit its 
own natural resources is intimately linked to its "p rogress and economic development" – a link rarely 
as evident as it is in these disputes.  Although Chin a's economy is large, according to the IMF's 2010 
World Economic Outlook , when assessed on a per capita basis, and adjusted for purchasing power 
parity, China's 2009 gross domestic product ranked 100
th out of 183 countries .  It is, therefore, critical 
for China to leverage its natural resource e ndowments to secure its own "progress and economic 
development", through the production and export of more sophisticated, technologically-advanced 
processed products.  The Preamble to the WTO Agreement  underscores the Members' commitment to 
use trade to, for example, "raise[e ] standards of living" and "ensur[e] full employment".  Those same 
objectives are expressed in Article XXXVI:1(a) of the GATT 1994. The Preamble also records WTO 
Members' explicit recognition of the role that the exploitation of natural resources plays in achieving 
not only development, but development that is sustainable .  Exploiting natural resources "in 
accordance with the objective of sustainable de velopment" requires resource-rich Members to 
reconcile competing goals.  In other words, also highlighted by the Brundtland Commission, achieving development that is sustainable requires a r esource-rich State to confront a delicate balance:  
while natural resources hold the potential to dr ive development, uncontrolled use will lead to 
irreversible resource depletion and environmental degradation, to the detriment of futu re generations, 
and at the expense of the State's long-term capacity to develop.   
6. Third , the WTO's commitment to development is reflected throughout the covered 
agreements, including in Part IV GATT 1994 on "Trade  and Development".  At the very same time 
that the principle of sovereignty over natural resources became accepted as a norm of customary 
international law, the Contracting Parties amended the GATT 1947 to introduce Part IV. 
Article XXXVI:5 of the GATT 1994 encourages resour ce-rich developing country Members to use 
their sovereign natural resources to enhance th eir own economic development, confirming the 
customary norm.  Specifically, it calls upon developing countries to diversify economic activity beyond the export of "unsophisticated" primary product s such as the natural resources at issue in these 
disputes. It constitutes relevant context for inte rpreting Articles XI:2(a) and XX of the GATT 1994, 
and has been described by the S ecretariat as a "GATT provision[] relating to export restrictions and 
charges". 
IV. THE INTERPRETATION OF ARTICLE S XI AND XX OF THE GATT 1994 IN 
LIGHT OF THE PRINCIPLE OF SOVEREIGNTY OVER NATURAL RESOURCES AND THE OBJECTIVES OF SUSTAINABLE DEVELOPMENT AND ECONOMIC 
DIVERSIFICATION 
A. T
HE MEANING OF ARTICLE XI:2( A) OF THE GATT  1994  IN LIGHT OF THE PRINCIPLE OF 
SOVEREIGNTY OVER NATURAL RESOURCES AND THE OBJECTIVES OF SUSTAINABLE 
DEVELOPMENT AND ECONOMIC DIVERSIFICATION  
7. Article XI:2(a) applies to export restrictions or prohibitions on "foodstu ffs or other products 
essential to the exporting [Member]".  The sole li mitation on the type of product covered by 
Article XI:2(a) is that it must be "essential to the exporting [Member]".  Context, in the form of the 
term "other products", demonstrates that the provi sion is not limited to products essential to ensure 
food security. Under Article XI:2(a), a product may be  essential for reasons other than subsistence.  
Paragraph 4 to the BOP Understanding confirms this reading, defining an "essential product" to 
include one that serves as an "input[] n eeded for production". Article XXXVI:5 and its Ad Note WT/DS394/R/Add.1 
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  provide additional context confirming that the essential nature of a "primary product" for a developing 
country may derive from the product's role in  securing economic diversification through the 
development of domestic processing industries.  Sp ecifically, the provision confirms that measures 
designed by developing country Members to foster  the "processing of primary products and the 
development of manufacturing industries" are not only legitimate, but encouraged by the WTO Membership.  Finally, this reading is also consis tent with the customary norm of sovereignty over 
natural resources, which was developed in recognition of  the "essential" role of natural resources. 
B. T
HE MEANING OF ARTICLE XX( G) OF THE GATT  1994  IN LIGHT OF THE PRINCIPLE OF 
SOVEREIGNTY OVER NATURAL RESOURCES AND THE OBJECTIVES OF SUSTAINABLE 
DEVELOPMENT AND ECONOMIC DIVERSIFICATION  
8. Article XX(g) protects a Member's right to take measures relating to the conservation of 
exhaustible natural resources, pr ovided they apply in conjunction with restrictions on domestic 
production or consumption.   
9. The phrase "relating to conservation" encompasses measures that have an objective and 
discernible connection or relationship to conservatio n.  In the case of non-renewable natural resources 
that are exploited commercially, conservation aims to manage human use of a resource over time, balancing its exploitation today with its preservation for tomorrow.  A key component of conservation 
is, therefore, controlling and managing the supply of the resource to achieve this balance – which is 
the function of China's restrictions on domestic and export supply of refractory-grade bauxite and 
fluorspar.  These measures preserve a portion of the resources for exploitation tomorrow, and they 
manage the limited supply available for exploitation today. Such manage ment of the resources is fully 
consistent with the authority of a State to use its  own resources for its own progress and development. 
10. Under Article XX(g), measures "relating to con servation" must be taken "in conjunction with 
restrictions on domestic production or consumpti on".  As such, conservation-related measures 
imposed on foreign trade must be applied along with domestic restrictions. As the Appellate Body in 
US - Gasoline  confirmed, the text of Article XX(g) do es not require that the domestic and foreign 
supply of a resource be burdened in an identical ma nner.  This interpretation is confirmed by the 
principle of sovereignty over natural resources.  As  already stated at paragraph 4 above, pursuant to 
that principle, States are entitled to use their own resources "for their own progress and economic development". Therefore, States are not required to subject foreign supply of a resource to identical 
restrictions as those imposed on domestic supply. If Article XX(g) were interpreted otherwise, it 
would depart from the customary norm with no textua l basis to support that incursion on sovereignty. 
11. Article XXXVI:5 and its Ad Note also confirm that Article XX(g) does not require identity 
between the restrictions on domestic and forei gn supply of natural resources.  As noted, in 
Article XXXVI:5, WTO Members recognize the obj ective of achieving economic diversification of 
developing country economies thr ough the development of industries to process primary products. 
C. T
HE MEANING OF ARTICLE XX( B) OF THE GATT  1994  IN LIGHT OF THE OBJECTIVE OF 
SUSTAINABLE DEVELOPMENT  
12. The objective of sustainable development informs that Article XX(g) allows WTO Members 
to "protect and preserve the environment" while at the same time achieving social and economic development goals. For this reason, pursuant to Ar ticle XX(b), China has the right to protect the 
health of its citizens and environment at its cho sen level of protection now and into the future.  
Consistent with the objective of sustainable developm ent, Article XX affirms the right to adopt trade  WT/DS394/R/Add.1 
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  measures, as part of a comprehensive set of intera cting policy instruments, to internalize costs of 
environmental pollution and contribute to re ducing pollution and energy consumption.   
D. T
HE MEANING OF THE CHAPEAU  TO ARTICLE XX OF THE GATT  1994  IN LIGHT OF ARTICLE 
XXXVI  GATT  1994  AND THE OBJECTIVE OF ECONOMIC DIVERSIFICATION  
13. Finally, measures taken in the exercise of a Me mber's sovereign right over natural resources, 
to promote sustainable development through " economic diversification", are not a "disguised 
restriction on international trade", under the chapeau to Article XX.  Such measures are taken, 
pursuant to a customary norm of international law, to pursue objectives explicitly  sanctioned by the  
covered agreements – either in the Preamble to the WTO Agreement or in Article XXXVI:5.  Hence, 
they cannot constitute a disguised or otherwise illegitimate restriction that would be rendered 
impermissible under the chapeau . 
V. THIRD PARTIES' INTERPRETATION OF  ARTICLE XI:2(A) OF THE GATT 1994  
14. In their third party submissions, Canada and Korea addressed the meaning and relevance of 
Article XI:2(a).   
15. First , China is puzzled by Canada's statement that "the test is quite different" in 
Article XI:2(a) than it is in Article XX(g).1  In particular, Canada observes that "there are no chapeau 
requirements" in Article XI:2(a), in contrast to Article XX(g),2 meaning that there is a "heightened 
need to be attentive" in interpreting and applying Article XI:2(a).3  If Canada's suggestion is that the 
Panel should ignore the text of Ar ticle XI:2(a), interpreting it to include  requirements that the drafters 
decided to exclude , its suggestion is inconsistent with  the principles of interpretation. 
16. Second , China disagrees with Canada's statemen t that China "effectively argue[s] that 
'temporary' in Article XI:2(a) actually means 'permanently'".4  Instead, in its first written submission, 
China stated that "[t]he disciplin e imposed by the word 'temporarily' is not absolute, but is instead 
relative" – to be specific, relative to the amount of time required to prevent or relieve a critical 
shortage of an essential product.5  This is a question that can only be judged in light of the relevant 
facts. 
17. Third , China notes that Korea and Canada misunderstand the purpose to which China puts 
examples illustrating the Complainants' inte rpretation of Articles XI:1 and XI:2(a).6  These examples 
demonstrate how the Complainants interpre t and apply Articles XI:1 and XI:2(a) for their own  export 
prohibitions and restrictions, outside the heat of litigation .  The Complainants have interpreted 
Articles XI:1 and XI:2(a) to permit, for 30 to 40 years at a time, the maintenance of export 
prohibitions on products that they deem essential for downstream domestic industries, and for which 
supply is potentially restricted, by virtue of st rong foreign demand, physical exhaustibility, and 
domestic regulatory limits on access.  The Panel should be alert for any opportunistic attempts by the 
Complainants to argue in these disputes that Ar ticles XI:1 and XI:2(a) should be interpreted 
differently, when applied to China's  export restrictions, than when applied to their own, more potent, 
export prohibitions .   
                                                      
1 Canada's third party submission, para. 17. 
2 Canada's third party submission, para. 17. 
3 Canada's third party submission, para. 17. 
4 Canada's third party submission, para. 18. 
5 China's first written submission, para. 374. 
6 Korea's third party submission, para. 22; Canada's third party submission, paras. 18 and 19.  See also 
China's first written submission, paras. 404 to 429. WT/DS394/R/Add.1 
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  18. Fourth , China disagrees with Canada's assertion that China relies on Australia's export 
restriction on merino sheep "as evidence of prac tice related to the 'temporary' question", under 
Article XI:2(a).
7  In fact, China's citation to the Aust ralian measure falls in the section of its 
submission addressing the meaning of the term "essential products",8 and it is used as context within 
the meaning of Article 31(2) VCLT.  In agreeing that Article XI:2(a) would apply to Australia's 
export ban, Australia's negotiating partners expres sed no concern that the "essential" character of 
merino sheep derived from the value of the product to downstream domestic users  (live merino sheep 
are prized for their economic value in the production of premium wool).   
VI. THE AVAILABILITY TO CHINA OF ARTICLE XX OF THE GATT 1994 TO 
JUSTIFY MEASURES FOUND TO BE INCONSISTENT WITH PARAGRAPH 11.3 OF THE ACCESSION PROTOCOL  
19. China, like any other State, enjoys the right  to regulate.  As the Appellate Body in China – 
Publications and Audiovisual Products , this is "an inherent power enjoyed by a Member's 
government", not a "right bestowed by international treaties such as the WTO Agreement ".  The WTO 
covered agreements affirm this "inherent power " of each WTO Member, through, among others, 
Articles XX and XXI of the GATT 1994, Articles XIV and XIV bis of the GATS, and the entirety of 
the SPS Agreement  and the TBT Agreement .  These provisions reflect the basic principle that the 
obligations assumed in relation to trade do not pr event Members from taking measures that promote 
other fundamental societal interests recognized in  the covered agreements. The Preamble to the WTO 
Agreement  affirms Members' inherent right to regulate,  stating that the WTO "preserve[s] the basic 
principles and … further[s] the objectives underl ying this multilateral trading system".   
20. In regulating trade, WTO Members must act in conformity with the provisions of the WTO 
covered agreements.  As the Appellate Body in China – Publications and Audiovisual Products  has 
explained, "the WTO Agreement  and its Annexes … operate to, among other things, discipline the 
exercise of each Member's inherent power to regul ate by requiring WTO Members to comply with the 
obligations that they have assumed thereunder".  To act "in a manner consistent with the WTO 
Agreement" implies either that a WTO Member 's exercise of regulatory powers "[does] not 
contravene any WTO obligation" or, if it does, th at it "be justified under an applicable exception".
9 
21. When a WTO Member exercises the right to regulate through instruments affecting trade in 
goods, the disciplines found in the GATT 1994 apply, in addition to any relevant disciplines set out in 
other Annex 1A agreements, as well as any di sciplines contained in the Member's accession 
commitments, which are incorporated into the WTO Agreement .  It is well-established that the WTO 
Agreement  and the other covered agreements form an "i nseparable package of rights and disciplines 
which have to be considered in conjunction".10   
22. Consistent with China's interpretation,  the text of Paragraph 11.3 of the Accession Protocol  
explicitly recognizes that China has not abandoned its "inherent power" to regulate export trade.  In 
particular, Annex 6 authorizes China, upon consultati on with other WTO Members, to depart from the 
export duty commitments assumed in Paragraph 11.3 if there are "exceptional circumstances ".  Thus, 
                                                      
7 Canada's third party submission, para. 20. 
8 China's first written submission, paras. 385 to 387. 
9 Appellate Body Report, China – Audiovisual Products , para. 223. 
10 Appellate Body Report, Argentina – Footwear (EC) , para. 81; Appellate Body Report, Brazil – 
Desiccated Coconut , pp. 178 and 179; Appellate Body Report,  US – Shrimp (Thailand)/US – Customs Bond 
Directive , para. 233; Appellate Body Report, US – Lamb , para. 69; Appellate Body Report, US – Steel 
Safeguards , para. 275.  WT/DS394/R/Add.1 
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  China's export duty commitments are, by their own terms, not inflexible obligations that prohibit 
regulation to promote interests such as conservati on and public health.  However, like Paragraph 5.1, 
the language in Annex 6 is not necessary to secure  China's "inherent power" to regulate its export 
trade.  Rather, the language in Annex 6 simply illustrates the drafters' recognition that China's 
"inherent power" remains. (With respect to Annex 6, China accepts that it has, so far, omitted to 
consult with other Members regarding the excepti onal circumstances justifying the export duties at 
issue, but it intends to do so.) 
23. This interpretation of Paragraph 11.3 is al so consistent with Paragraph 170 of the Working 
Party Report , which notes China's commitment that, upon accession, "its laws and regulations relating 
to all … taxes levied on imports and exports would be in  full conformity with its WTO obligations ".
11  
This language is similar to Paragraph 5.1 of the Accession Protocol .  Such disciplines preserve a 
balance between allowing the right to regulate trade and subjecting the exercise of that right to obligations that attach to exceptions , such as the requirements set forth in Article XX.  In other words, 
the right to regulate is not unfettered, but is subject to appropriate constraints.   
24. China recognizes that, under Paragraph 11.3, it has assumed obligations regarding export 
duties that have not been assumed by other WTO Members.  However, China finds repugnant the argument that it has not only assumed uniquely onerous  obligations, but also that it is denied its 
"inherent power" to take measures in relation to these uniquely onerous obligations to promote other 
fundamental interests, such as conservation and public  health.  If this argument were accepted, China 
would be subject to uniquely onerous obligations  and would be deprived, again uniquely, of its 
"inherent power" to regulate trade.  In China's view , such an interpretation fails to respect the balance 
that is otherwise struck throughout the covered agreements. 
 
                                                      
11 Working Party Report , Paragraph 170. WT/DS394/R/Add.1 
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  ANNEX D-3 
 
EXECUTIVE SUMMARY OF THE CLOSIN G ORAL STATEMENT OF CHINA  
AT THE FIRST SUBSTANTIVE MEETING 
 
I. INTRODUCTION 
1. In this Closing Statement, China addresses three issues:  (1) the Panel's terms of reference, 
which the Chairman has suggested that the Panel will rule upon shortly;  (2) the need for the Panel to 
rule on the 2010 measures to resolve the dispute;  and, (3) the applicability of Article XX of the 
GATT 1994 to Paragraph 11.3 of China's Accession Protocol .  Other issues will be developed in 
China's remaining submissions. 
II. TERMS OF REFERENCE 
2. China has made a series of arguments regarding the Panel's terms of reference: 
 first, Section III of the Panel requests does not comply with Article 6.2 of the DSU 
because the Complainants have not presente d the problem clearly, given their failure 
to connect the narrative paragraphs  in S ection III with the 37 listed measures and 13 
treaty provisions;   
 second , the European Union has failed to identify China's omission to publish the 
coke quota as a measure at issue;  and, 
 third , 13 of the 15 measures referenced in the Complainants' first written submissions 
regarding the alleged MEPs, are not identified in either the Consultations requests, or 
the Panel request, or both;  these 13 measures are, therefore, not part of the terms of 
reference. 
3. On the first issue, China reca lls that Section III of the Panel requests provides a series of 
narrative paragraphs, together with a list of 37 measures and 13 treaty provisions.  The narrative 
paragraphs indicate that subsets of claims, regardi ng subsets of the 13 treaty provisions, are made with 
respect to subsets of the 37 measures.  However, the Panel requests fail to present the problem clearly, 
because they do not identify which specific claims  are made, under which specific treaty provisions , 
with respect to which specific measures .1  The Complainants respond that there is no need for 
connections to be made between the narrative paragraphs and the 37 measures and 13 treaty 
provisions, because claims are made under all 13 listed treaty provisions with respect to all 37 of the 
listed measures.2  The Panel's preliminary ruling accepted that the Complainants' explanation of the 
Panel requests " seems to contradict " the terms of those Requests.3  The Panel took note that the 
Complainants committed that " all possible concerns over the undefined scope of their challenge " 
would be answered in the Compla inants' first written submissions.4  However, those submissions have 
simply emphasized continuing and significan t concerns regarding the Panel Requests. 
                                                      
1 See China's Comments of 23 April 2010, paras. 48 to 63. 
2 See Joint Response of the Co-Complainants of 21 April 2010, paras. 26 to 30. 
3 Panel's Preliminary Ruling of 18 May 2010, para. 36. 
4 Panel's Preliminary Ruling of 18 May 2010, para. 38.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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  4. China recalls that a first written submission cannot cure defects  in a panel request, although it 
may clarify ambiguities in the wording  of a panel request.
5  In this case, the Panel is not faced with a 
situation in which a first written submission clarifie s ambiguities in the wording of a panel request.  
Rather, the wording of the Panel requests fails to meet a basic element of Article 6.2 DSU – 
specifically, the Panel requests do not present the problem clearly, because they make no connections between the narrative paragraphs and the listed measures and treaty provisions. Indeed, far from 
presenting the problem "clearly", the Panel requests are internally contradictory. 
5. The Complainants' first written submissions simp ly emphasize the deficiencies in the Panel 
Requests.  In particular, their submissions demonstrate that the Complainants do not make all claims 
regarding all measures, as they asserted in a bid to save their Panel requests.  As a result, the 
Complainants' arguments in defense of their Panel requests are contradicted by both the terms of the Panel requests and the submissions. Furthermore, th e Complainants' first written submissions do not 
state which subset of claims is made with respect to which subset of measures.  Indeed, in its opening 
statement, the European Union offered an insi ght into how China and the Panel should go about 
identifying which specific measures are subject to which specific claims.  The European Union said 
that the measures at issue could be identified through "the torture  of a recitation of all the footnotes  in 
the European Union's first written submission".
6  It added that "a simple read of the relevant parts of 
the Facts section of the submission  shows that the measures at issue in this dispute are clearly 
identified".7   
6. Thus, to identify the measures at issue, the European Union asks the Panel to read the factual 
portion of its first written submission . Moreover, the Panel should identify the measures by 
undertaking the "tortured" process of sifting through the "footnotes".  China, in fact, has already said 
that, to identify which specific me asures are subject to which specific claims in Section III, it had 
resorted to sifting through the "footnotes" in the Complainants' first written submissions to find every 
"passing reference" to a measure that might  be at issue.8  Article 6.2 of the DSU prevents the 
uncertainty inherent in this "tortured" process.   This provision requires a panel to read the panel 
request , and not the footnotes in the first written submi ssion, to identify which measures are subject to 
particular claims. Neither China nor the Panel is  expected to undertake the "tortured" process of 
sifting through footnotes to comprehend the scope of  the dispute. The Complainants have, therefore, 
failed to comply with the basic requirement in Artic le 6.2 of the DSU to present the problem clearly in 
their Panel requests. 
7. On the second issue, China can be briefer.  Th e European Union argues that China failed to 
publish its quota for coke. However, its Panel Re quest does not identify this omission as a specific 
measure at issue. The European Union asserts  that it identified this measure through a general 
statement , in the first paragraph of Section III, that China " does not publish certain measures 
pertaining to requirements, restri ctions, or prohi bitions on exports ".  However, this general assertion 
                                                      
5 Appellate Body Report, EC – Bananas III , paras. 142 and 143; also Appellate Body Report, US – 
Carbon Steel , para. 127; Appellate Body Report, EC – Computer Equipment , para. 72, footnote 49; Panel 
Report, China – Publications and Audiovisual Products , para. 7.23; Panel Report, US – Continued Zeroing , 
para. 7.63; Panel Report, Japan – DRAMS (Korea) , para. 7.9; Panel Report, US – Countervailing Measures on 
Certain EC Products (Article 21.5 – EC) , para. 7.51; Panel Report, US – Softwood Lumber V , para. 7.25;  Panel 
Report, US – Line Pipe , para. 7.125; Panel Reports, Canada/US – Continued Suspension , para. 6.34; Panel 
Report, US – Corrosion Resistant Steel Sunset Review , para. 7.47;  Panel Report , Chile – Price Brand System , 
para. 7.150. 
6 European Union's opening statement of 31 August 2010, para. 28. 
7 European Union's opening statement of 31 August 2010, para. 28. 
8 China's first written submission, paras. 22 (including footnote 13), 23, and 25. WT/DS394/R/Add.1 
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  regarding "certain measures" relating to a variety of legal instruments is too vague to identify the 
alleged omission regarding c oke as a specific measure. 
8. A complainant must identify the measures at issue with sufficient precision to enable the 
respondent and Panel to ascertain the particular matter that has been referred to adjudication.
9  For 
example, in the fourth paragraph of Section III, the European Union identified a specific omission at 
issue by referencing the type of measure not published ( i.e., a quota) and the product for which a 
quota was not published ( i.e., zinc).  This formulation is sufficient to identify the failure to publish a 
quota for zinc as a measure.   
9. If the general statement  in the first paragraph of Secti on III, quoted a moment ago, were 
sufficient to identify any omission to publish "require ments, restrictions, or prohibitions on exports", 
there would have been no need fo r the European Union to identify specifically  the omission regarding 
the zinc quota.  Indeed, the European Union's deci sion to identify an omission to publish the zinc 
quota simply confirms that it has failed to speci fy a similar omission regarding the coke quota. 
10. The third issue that China has raised is the Complainants' failure to include 13 of the 15 
alleged MEP measures in their Cons ultations and/or Panel requests.  Today's discussion of that issue 
confirms that the 13 measures cannot form part  of the Panel's terms of reference.   
III. THE PANEL SHOULD RULE ON THE 2010 MEASURES TO RESOLVE THE 
DISPUTE, AND SHOULD NOT RULE ON THE 2009 MEASURES 
11. China turns now to the Panel's consideration of  the 2009 and 2010 measures.  As explained in 
paragraphs 53 to 70 of China's first written submis sion, the Complainants' Panel requests identify a 
number of measures that were withdrawn before th e Panel was established, as well as measures that 
were withdrawn after that date.  In some cases, the measures were replaced by new measures, and in some cases they were not.  China accepts that the expired measures all form part of the Panel's terms 
of reference to the extent they were included in both the Panel and Consultation requests.  In that 
event, they may be the subject of findings, although  they cannot be the subject of recommendations.   
12. Where withdrawn measures have not been replaced, China has encouraged the Panel not to 
make findings on the expired measures, because doing so does not help to resolve a dispute that has 
already been settled by the withdrawal of the measure.
10  This argument applies to:  the special export 
duty on yellow phosphorous;  the export duty on bauxite ;  and, the export quota on fluorspar.  In any 
event, as the Appellate Body has held, the Pane l cannot make a recommendation regarding measures 
that have been withdrawn, because there is nothi ng further China can do to bring the withdrawn 
measure into compliance.  Where withdrawn measures have been replaced, China is not seeking to 
evade scrutiny of its measures.  The Complainants have challenged a series of annual measures, such 
as annual measures announcing quotas and export duties.  In most cases, they included the measures 
                                                      
9 See, e.g., Appellate Body Report, EC – Bananas III , para. 142; Appellate Body Report, Dominican 
Republic – Import and Sale of Cigarettes , para. 120; Appellate Body Report, US – Carbon Steel , paras. 125 and 
171. On the due process objective of panel requests, see Appellate Body Report,  US – Carbon Steel , para. 126; 
Appellate Body Report,  US – Continued Zeroing , para. 161; Appellate Body Report,  EC – Bananas III , 
para. 142; Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 108; Appellate Body 
Report, EC – Selected Customs Matters , para. 130; Appellate Body Report, EC – Chicken Cuts, para. 155; 
Appellate Body Report, EC – Computer Equipment , para. 70; Appellate Body Report, Korea – Dairy , paras. 126 
and 127; Appellate Body Report, Brazil –Desiccated Coconut, p. 22; Appellate Body Report, India – Patents 
(US) , para. 87; Appellate Body Report, EC – Export Subsidies on Sugar , para. 143; Panel Report, Mexico – 
Anti-Dumping Measures on Rice , para. 7.28. 
10 China's first written submission, paras. 63 to 67.  WT/DS394/R/Add.1 
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  that applied in 2009 in the Panel Requests ("2009 measures"), although for export quotas, including 
on bauxite, the measure that applies in 2010 w as adopted before establishment and was also 
specifically identified by name ("2010 measure").
11  The Complainants also expressly included 
"replacement" measures in the Panel Requests,12 and the Panel expressly ruled that "replacement" 
measures are part of its terms of reference.13  There is, therefore, no question that the 2010 
replacement measures are all within the Panel's terms of reference.   
13. Although the Panel requests include the replace ment measures, sometimes by name, and 
although the Complainants insisted as recently as th e hearing on 23 April 2010 that the replacement 
measures were included in the terms of reference, th ey now appear to urge the Panel to refrain from 
ruling on the 2010 measures.  This appears to be not hing more than an attempt to prevent the Panel 
from ruling on China's defenses, including un der Article XX(g) GATT 1994, which involves 
extraction and production caps adopted in 2010.  Ch ina submits that, to resolve these disputes – the 
standard the Complainants have urged the Panel to  adopt in deciding on which measures to rule – the 
Panel must rule on the 2010 measures, which are cu rrently in force, together with the defenses 
relevant to them. These measures are the source of the dispute today, and the source of the alleged 
ongoing nullification or impairment of  benefits.  The Panel would fail to discharge its responsibility to 
resolve this dispute if it declined to rule on the measures currently applied.  It would also fail to 
resolve the dispute if it failed to address China's a ssertion that certain of its measures are justified by 
Article XX(g). Furthermore, the Panel would fail to resolve the dispute if it ruled solely on the 2009 
measures, which have been replaced and are, therefor e, no longer the source of the dispute.  In sum, 
the prompt resolution of this dispute calls for the Panel to address the 2010 measures, and not the 2009 measures. 
14. China wishes to emphasize one further crucial poi nt.  If the Panel decides to rule on the 2009 
measures, it cannot make recommendations regard ing these measures because they have ceased to 
exist.
14  Without recommendations, there will be no re quirement for China to adopt "measures taken 
to comply".  The Complainants will have secured no recommendations requiring China to bring its quotas and export duties on the products at issue into conformity. 
15. As a result, the Complainants cannot elect  to pursue solely the 2009 measures in these 
proceedings, thereby evading  China's defenses regarding the 2010 measures, and then pursue 
compliance  proceedings regarding the 2010 or other s ubsequent replacement measures.  To permit 
such a litigation strategy would deprive China of tim ely consideration of its defenses and – should the 
need arise – its right to revise the quota and duty measures during an implementation period that 
would follow original pr oceedings, but that would not follow compliance proceedings that assessed 
China's defenses for the first time.  In China's view, the prompt settlement of disputes must be fair and balanced in its treatment of complainants  and respondents at all procedural stages. 
16. Accordingly, the Complainants face a choice. If th ey wish the Panel to decline to examine the 
current 2010 measures, and instead to examine only the now-replaced 2009 measures, they must 
                                                      
11 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural and Industrial 
Products (Ministry of Commerce, Notice (2009) No. 88, October 29, 2009) (Exhibit CHN-8). 
12 See final bullet point of list of measures in each Section of China – Measures Related to the 
Exportation of Various Raw Materials  – Request for the Establishment of a Panel by the European 
Communities, WT/DS395/7 (9 November 2009); China – Measures Related to the Exportation of Various Raw 
Materials – Request for the Establishment of a Panel by  Mexico, WT/DS398/6, (9 November 2009); China – 
Measures Related to the Exportation of Various Raw Materials – Request for the Establishment of a Panel by 
the United States, WT/DS394/7 (9 November 2009). 
13 Panel's Preliminary Ruling of 18 May 2010, para. 20. 
14 Appellate Body Report, US – Certain EC Products , para. 81. WT/DS394/R/Add.1 
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  forego recommendations regarding the 2009 measures, w ith the inherent consequences that will bring 
in any implementation proceedings in these disputes. 
IV. ARTICLE XX OF THE GATT 1994 APPLIES TO CHINA'S COMMITMENTS 
UNDER PARAGRAPH 11.3 OF THE ACCESSION PROTOCOL  
17. The final issue that China will address is the applicability of Article XX of the GATT 1994 to 
China's commitments under Paragraph 11.3 of the Accession Protocol . In its opening statement, China 
explained that the right to regulate is "an inhere nt power enjoyed by a Member's government", not a 
"right bestowed by international treaties such as the WTO Agreement ".
15  China also noted that this 
"inherent right" is affirmed throughout the c overed agreements, showing it is among the basic 
principles of the multilateral trading system.  The Preamble to the WTO Agreement  – of which China's 
Accession Protocol  forms part – recognizes that the cove red agreements "preserve the basic 
principles" underlying the multilateral trading system. 
18. In the case of China's export duti es, Paragraph 11.3 and Annex 6 Accession Protocol , and 
Paragraph 170 of the Working Party Report , confirm that China may impose export duties that violate 
its commitments, among others in "exceptional ci rcumstances", provided that China respects the 
"obligations" that attach to relevant exce ptions, such as Article XX of the GATT 1994.16 
19. Today, the Panel asked what boundaries circum scribe China's "inherent right" to regulate 
trade.  The boundaries circumscribing Ch ina's right to regulate trade are the same  as the boundaries 
circumscribing other Members' right to regul ate trade.  Those boundaries are found in the obligations  
that attach to relevant exceptions.  For exampl e, just like other WTO Members, China's right to 
regulate trade in goods for conservation-related reasons  is disciplined by the requirements set forth in 
Article XX(g) and the chapeau  of Article XX.  The significant diff erence for China is that, as a result 
of Paragraph 11.3, it bears the burden to establish its adherence to the obligations attached to 
applicable exceptions, in order to regulate trade thr ough the maintenance of export duties.  In sum, the 
covered agreements do not deprive Members of the right to regulate, but set "boundaries" for, and 
thereby discipline, the manner in which that right is exercised. 
 
  
                                                      
15 China's Opening Statement of 31 August 2010, para. 67.  See also  Appellate Body Report, China – 
Publications and Audiovisual Products , para. 222.  See also Panel Report, Argentina – Hides and Leather , 
para. 11.98 ("The government also has a relevant legal inte rest in the transaction based on the sovereign right to 
regulation ..."). 
16 China's opening statement of 31 August 2010, para. 73.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
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 ANNEX D-4 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION 
OF CHINA 
  
I. INTRODUCTION 
1. These disputes involve the sovereign right of the China to chart a course, over time, towards 
sustainable development through the exploitation of  a series of natural resources and resource-based 
products that the Complainants have characterized as " critical  inputs for the most basic industries of 
modern society", as " essential  to" and " indispensable  for" the production of basic commodities, and 
as "necessary  for the manufacturing of a very broad array of goods".   
II. THE PANEL SHOULD RULE ON THE 2010 MEASURES TO RESOLVE THE 
DISPUTES, AND SHOULD NOT RULE ON THE 2009 MEASURES 
2. The Complainants have asked the Panel to make findings and recommendations concerning a 
number of 2009 measures, which were withdrawn befo re, or since, the Panel's establishment, or 
replaced by 2010 measures.   
3. China emphasizes that ruling on the expired 2009 measures serves no purpose, as they are 
already withdrawn; in any event, the Panel may not make recommendations regarding those expired 
measures.  Additionally, the prompt, positive resoluti on of these disputes calls for the Panel to rule on 
measures currently in force, including the 2010 replacement measures that prolong  or adjust  the 2009 
measures.  It would not constitute a fair and balanced settlement of these disputes, if the Complainants 
could elect to pursue solely the 2009 measures, th ereby evading China's defenses regarding the 2010 
measures, based on changes it has made to its regulatory environment concerning its natural 
resources.  Moreover, as noted above, were the Panel to make findings solely on the 2009 measures, it 
could not make any recommendations, since tho se measures have ceased to exist.  Without 
recommendations, there will be no requirement for Ch ina to adopt "measures taken to comply".  
4. Finally, the 2010 measures are within the Panel' s terms of reference.  The Complainants 
expressly included "replacement" measures in the Pane l requests, and the Panel expressly ruled, in the 
first part of its preliminary ruling, that "replaceme nt" measures are part of its terms of reference.  
There is, therefore, no question that the 2010 replacement measures, including measures that prolong 
and/or adjust the product category of the 2009 measur es, are all within the Panel's terms of reference. 
III. THE COMPLAINANTS HAVE FAILED TO ESTABLISH THAT THE EXPORT 
QUOTAS, INCLUDING ON REFRACTORY BAUXITE, ARE INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994 AND PARAGRAPHS 162 AND 165 OF 
THE WORKING PARTY  REPORT 
5. At the outset, China recalls the European Uni on's failure to identify the measures imposing 
the export quotas subject to its Article XI:1 claim.  In  the first part of its preliminary ruling, the Panel 
found that it can only make recommendations with  respect to "specific provisions of specific 
measures and therefore may need to consider and ex amine the specific situation of specific challenged 
instruments as they apply to specific products or gr oup of products".  With respect to the European 
Union claims, the Panel remains unable to make findi ngs "sufficiently precise" to enable the DSB to 
make recommendations that will allow prompt and effective resolution of these disputes. WT/DS394/R/Add.1 
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Page D-24 
  
 6. The Complainants have also failed to demonstrat e that Article XI:1 applies to China's export 
quotas.  The Complainants assert that China bears the burden of showing that its measures fall under Article XI:2(a) because Article XI:2(a) contains "d efenses" or "exceptions".  However, the Appellate 
Body has clarified that complainants may have to prove a responding Member's non-compliance even 
with "positive obligations" imposing "conditions", par ticularly where, as here, there was a reasonable 
basis, given the Complainants' own arguments concerni ng the products at issue, to understand that the 
quotas might not violate Article XI:1, in light of Article XI:2(a).     
7. The Parties disagree on the meaning of the phr ase "other products essential for the exporting 
[Member]" in Article XI:2(a).  Article XI:2(a) does not a priori prescribe or exclude any criterion to 
determine essentialness.  China refers to the ordinary meaning of the term, the WTO Agreement 's 
Preamble, Article XXXVI:5 of the GATT 1994, Paragraph 4 of the BOP Understanding , and the 
drafters' agreement on the application of Article XI :2(a) to Australia's export ban on merino sheep to 
establish that a product must be essential to the exporting Member .  China has demonstrated that 
refractory bauxite is essential because it is an e xhaustible and rapidly depl eting product with unique 
chemical and physical characteristics that stand at  the base of a value ch ain collectively constituting 
50% of China's GDP, with a host of attendant benefits for social and economic growth and 
development.  The Complainants' critique of the appr oach used by China's e xpert must fail, because 
this approach directly addresses the degree of shor tage and the degree of essentialness of refractory 
bauxite.  Moreover, the Complainants themselves rely  on similar approaches, in formulating their own 
trade measures on the same category of product. 
8. The Parties further disagree on the meaning of the phrase "critical shortage".  Contrary to the 
Complainants' assertions, the phrase's immediate context confirms that a shortage may be critical even 
when remediable through an export restriction , as opposed to an export ban.  Moreover, 
Article XI:2(a) provides that Members can impose export quotas to prevent  any risk of a critical 
shortage that  they perceive, as a result of their own risk evaluation and appreciation .  The 
Complainants, therefore, err in considering that such restrictions can only be imposed to cure a 
"sudden" "exogenous shock".  Factor s that may be taken into account in determining the existence of 
a critical shortage or risk thereof are various, and include limited geological or physical availability, 
conservation measures that limit extraction and produ ction, the development and use of technology, 
the absence of available substitutes, local and regional communities' acceptance of production 
practices (mining for instance), the level of domestic  and international demand and the level of access 
to foreign supply.   
9. Article XI:2(a) also requires that export restri ctions be "temporarily applied", that is, be 
limited to the time required to prevent or relieve  critical shortages of products essential to the 
exporting Member.  In relation to the measure at issue, China limits its temporal application and 
reviews the quota on an  annual basi s. 
10. Accordingly, the export quota on refractory baux ite satisfies Article XI:2(a), and therefore 
falls outside the scope of application of Article XI:1 .  Measures consistent with Article XI:1 are also 
consistent with Paragra phs  162 and 165 of the Working Party Report .   
IV. THE AVAILABILITY OF ARTICLE XX OF  THE GATT 1994 IN DEFENSE OF A 
CLAIM UNDER PARAGRAPH 11.3 OF THE ACCESSION PROTOCOL 
11. China can resort to Article XX of the GATT 1994  in defense of a claim that it imposes export 
duties contrary to Paragraph 11.3 of the Accession Protocol .  The basis for China's right to apply 
export duties, provided it complies with obligations attaching to the relevant  subparagraphs and the 
chapeau  of Article XX, is found in the text of the c overed agreements, read as a whole.  The covered  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
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 agreements affirm the inherent right of every WT O Member to regulate trade, which the Appellate 
Body in China – Audiovisual Products  described as "an inherent power enjoyed by a Member's 
government", rather than a "right bestow ed by international treaties such as the WTO Agreement ". 
12. The text of Paragraph 11.3 shows that WTO Me mbers, in imposing an obligation on China to 
forego export duties in certain circumstances, did not exclude the inherent right to regulate.  Indeed, 
as Annex 6 demonstrates, the export duty commitments in  Paragraph 11.3 are, by their own terms, not 
inflexible obligations that prohibit regulation to  promote interests such as conservation and public 
health.   
13. Paragraph 170 of the Working Party Report  also offers important additional support for 
China's interpretation of the covered agreements.  The text of Paragraph 170, which falls under the 
heading " Taxes  and Charges Levied on Imports and Exports ", confirms China's commitment to 
"ensure that its laws and regulations  relating to all fees, charges or taxes levied on imports and exports 
[are] in full conformity with its WTO obligations, including  Articles I, III:2 and 4, and XI:1 of the 
GATT 1994".  The heading of this provision demonstrates that it applies to export taxes or duties, 
such as those at issue.  The use of  the term "including" makes clear that the list of provisions cited in 
Paragraph 170 is not e xhaustive – it refers to all goods-related obligati ons assumed under the WTO 
covered agreements.  This provision, th erefore, confirms the application of all commitments assumed 
under the GATT 1994 to China's laws and regulations relating to export duties, such as the commitment to apply WTO-inconsistent measures for conservation and health objectives only in so 
far as they are consistent with obligations a ttaching to the relevant subparagraphs and the chapeau  of 
Article XX.     
14. China recalls that the GATT 1994 and the Accession Protocol , together with the other 
covered agreements, form an integral part of the WT O Agreement.  They apply together as part of a 
single treaty instrument, the WTO Agreement – a single undertaking accepted by all WTO Members.  
Within this single treaty framework, the Appellate  Body has noted that the function of exceptions, 
such as Article XX of the GATT 1994, is, with r espect to goods-related obligations, "to permit 
important state interests – including the protection of human health, as well as the conservation of exhaustible natural resources – to find expression".  In other words, the pursuit of non-trade interests 
may, in certain circumstances, prevail over the pur suit of trade interests.  In pursuing non-trade 
interests, the Appellate Body confirmed that Article XX protects WTO Members' "large measure of 
autonomy" to regulate.  As also confirmed by the Appellate Body, the source of that autonomy is "an 
inherent power enjoyed by a Member's government", rather than a "right bestowed by international 
treaties such as the WTO Agreement".  Insofar as tr ade measures are used to give effect to policies 
enshrined in Article XX, the Appellate Body has confirmed that Members' "autonomy is 
circumscribed only by the need to respect the re quirements of the General Agreement and the other 
covered agreements". 
15. This background is critical to the Panel's c onsideration of the Complainants' attempt to 
deprive China, and China alone, of its inherent right  to regulate trade, and its autonomy to determine 
its own environmental, health a nd conservation policies, within the bounds of Article XX.  Against 
this background, China finds repugnant the suggestio n that it has not only assumed uniquely onerous 
obligations, like the obligation un der Paragraph 11.3 regarding expor t duties on goods, but that it is 
also denied its "inherent power" and "autonomy" to take measures in relation to those obligations to 
promote other fundamental interests, such as con servation and public health, where it satisfies the 
conditions required of such measures.  The sugg estion that an "inherent power" reserving for all 
Members the "autonomy" to take measures in relati on to these most fundamental of interests can be 
denied unless expressly re-affirmed in artificially pa rsed constituent parts of a single undertaking is 
distinctly contrary to the harmonious interpreta tion of the covered agreements required by the WT/DS394/R/Add.1 
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 Appellate Body.  To do so would be to turn in herent rights into acquired rights, autonomy into 
heteronomy, and the single undertaking into a series of detached agreements.  Any such suggestion 
must fail, in particular where, as here, the text c onfirms the availability of Article XX as a defense to 
claims under Paragraph 11.3. 
V. THE EXPORT RESTRAINTS APPLIED TO REFRACTORY BAUXITE AND 
FLUORSPAR ARE JUSTIFIED PURSUANT TO ARTICLE XX(G) OF THE GATT 1994 
16. The export duty on fluorspar and the export quot a on refractory bauxite are justified pursuant 
to Article XX(g) of the GATT 1994 because they "relat [e] to the conservation of exhaustible natural 
resources" and are "made effective in conjunction with restrictions on domestic production or 
consumption."  The Complainants have not addr essed China's factual arguments and evidence.  
Relying on well-established principles of treaty interp retation, China therefore limits its response to 
the Complainants' interpretive arguments. 
17. The phrase "relating to conservation of exhaustible natural resources" must be read in light of 
the objective of sustainable developmen t, stated in the Preamble to the WTO Agreement  – an objective 
the Complainants erroneously discard as interpretiv ely irrelevant.  Sustainable development requires 
that economic development and conservation be a ligned through the effec tive management of scarce 
resources.  In light thereof, the term "conservation"  refers to the management of the limited supply of 
exhaustible natural resources over time.  In that se nse, the export restraints at issue "relat[e] to 
conservation" because they are part and parcel of China's measures that mana ge the limited supply of 
refractory bauxite and fluorspar, whic h are exhaustible natural resources. 
18. All Parties accept, in principle, the Appella te Body's interpretation of the phrase "made 
effective in conjunction with domestic restricti ons on production or consumption" as meaning that 
identical treatment of foreign and domestic trade is  not required.  Neverthe less, the European Union 
asserts that domestic users cannot permissibly be su bject to "less burdens" than foreign users, and 
foreign users cannot be subject to "more burdens " than domestic users – meaning that identical 
treatment of domestic and foreign users is required.  This position must be rejected because (i) the 
Appellate Body has recognized that no particular  distribution of the burden is required; (ii) 
Article XXXVI:5 of the GATT 1994 and its Ad Note confirm that the burden on domestic and foreign 
supply need not be identical because developi ng countries may pursue economic diversification 
through development of domestic industries to process primary products;  and, (i ii) consistent with the 
customary norm of sovereignty over natural resources, Article XX(g) does not oblige a resource-endowed WTO Member to ensure that other use r-countries benefit equally or identically from the 
exploitation of its resources – after all, the WTO Agreement is not a commodity-sharing agreement. 
19. Finally, the Parties also disagree on the meaning of the chapeau to Article XX.  China 
clarifies its earlier argument that applying measu res consistently with legitimate objectives recognized 
in the covered agreements cannot form the basis fo r an assertion that China's export restraints are a 
"disguised restriction on international trade".  An  export restriction that is applied in a manner 
consistent with the objectives of sustainable development and Article XXXVI:5, and with the 
customary norm of sovereignty over natural resources, cannot be impermissible under the chapeau  of 
Article XX, simply because the Complainants contest  the particular share of China's resources that 
they have been allocated.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-27 
  
 VI. THE EXPORT DUTIES AND QUOTAS APPLIED TO THE EPR PRODUCTS', 
MAGNESIUM METAL SCRAP, MANGANESE METAL SCRAP, AND ZINC SCRAP ARE JUSTIFIED PURSUANT TO ARTICLE XX(B) OF THE GATT 1994 
A. C
OMPLAINANTS HAVE NOT REBUTTED CHINA 'S DEMONSTRATION THAT EXPORT MEASURES 
ON THE EPR  PRODUCTS SATISFY THE CRITERIA SET OUT IN ARTICLE XX( B) OF THE 
GATT 1994 
20. The Complainants have yet to rebut China's factual argument and evidence that export duties 
and quotas on coke, magnesium and manganese meta ls, silicon carbide, magnesium and manganese 
metal scrap, and zinc scrap are justifie d under Article XX(b) of the GATT 1994.   
21. First , the Complainants improperly argue that China's stated objective is a post hoc 
rationalization.  China has provided contemporane ous evidence showing that its export measures on 
EPR products have always and explic itly been linked to those objectives, long before these disputes.  
Moreover, China has demonstrated that these measures are not standal one initiatives to curb pollution, 
but are key components of a comprehensive regulatory framework aimed at reducing pollution and, 
thereby, reducing risks to human, animal and plant life and health. 
22. Second , the Complainants' allegation that China's ex port restrictions on the products at issue 
"severely distort the conditions of competition in the global marketplace" must also be rejected, 
because it is based on an assessment of the effe ct of the measures imposed on the products 
collectively, and fails to isolate the trade effect of those measures themselves  from other economic 
and regulatory factors having a greater impact than  China's restrictions on the availability of the 
products at issue.  China also recalls that the trade restrictiveness of its measures is limited.  In fact, 
China's measures are likely to have trade stimulating  effects in the medium to long term.  
23. Third , the Complainants have failed to rebut China' s showing that its export restrictions make 
a material contribution to Article XX(b) objectives, making them "necessary" under that provision.  
China's export restrictions contribute to a decr ease in domestic production of the highly polluting 
products at issue;  they constitute a key element of  a comprehensive strategy aimed at restructuring 
China's industry towards sustainable environmental pr otection.  China has provided expert statements 
showing that production of EPR products, and not their use by downstream industries, is the most 
polluting process.  Moreover, a decrease in availabilit y of EPR products is more likely to impact the 
quality  of the finished products than their quantity ;  also,  pollution resulting from downstream 
processes will be counterbalanced by pollution savings upstream (less mining, refining, 
transportation).   
24. Fourth , none of the alternative measures proposed by  the Complainants are available to China 
because they are all already in place.  The Appellate Body in Brazil – Retreaded Tyres  established 
that less restrictive alternatives must be reasonably available, must not already be in place, and must 
permit achievement of the same level of protection.  As part of its comprehens ive strategy to address 
risks resulting from production of EPR products, Chin a implements pollution controls in the form of 
emission standards, energy consumption caps per un it of EPR product, pollutant discharge fees and 
industry entrance standards and impact assessments.  China also requires industry to shift to less 
environmentally harmful production, through the prohibition of polluting techniques and technologies, the elimination of outdated produc tion capacity, or incentives to use recycling 
equipment.  Finally, China imposes compliance w ith environmental regulations that control the 
polluting effect of the production processes. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page D-28 
  
 B. C
HINA HAS SUCCESSFULLY DEMONSTRATED THAT  ITS EXPORT MEASURES ON MAGNESIUM 
METAL SCRAP , MANGANESE METAL SCRAP , AND ZINC SCRAP ("METAL SCRAP PRODUCTS ") 
SATISFY THE CRITERIA SET OUT IN ARTICLE XX( B) OF THE GATT  1994    
25. China's export duties on metal scrap products ar e aimed at reducing risks to human, animal 
and plant life and health and are apt to make a ma terial contribution to Ch ina's environmental and 
public health objectives.  Contrary to the Compla inants' allegations, pronouncements of the Chinese 
government on the purpose of export duties on scrap , as well as the overall design of the measures, 
which evidence a holistic regulatory effort to devel op a recycling industry, show that export duties on 
metal scrap products serve envir onmental and health goals.  
26. Furthermore, China has shown that its export duti es on metal scrap products are "apt to" make 
a material contribution to the objective recogni zed under subparagraph (b) because, by securing a 
continuous and reliable flow of supply of metal scrap in China, they are a key element of a 
comprehensive strategy aimed at developing a recy cling industry in China – a strategy that the 
European Union and the United States themselv es previously adopted, through their own export 
prohibitions and restrictions on metal scrap products .  To assess the necessity  of China's measures, 
account should also be taken of thei r limited trade distorting effect ( due to limited supplies in China, 
which imports the majority of its scrap produc ts), a fact acknowledged by the Complainants. 
27. Finally, none of the alternative measures proposed by the Complainants are reasonably 
available to China, to the extent they are not  already in place. China already imposes pollution 
controls on primary producti on, and promotes recycling of consumer goods. These measures 
complement rather than substitute for China's expor t duties.  The Complainants' suggestion that China 
require producers to shift from primary to secondary  production is not a measu re reasonably available 
to China. Given the infancy of China's recycling industry, such a requirement would result in bankruptcies and closures which would impose prohibitive costs on the Chinese economy.  
C. C
HINA 'S MEASURES SATISFY THE REQUIREMENTS OF THE CHAPEAU TO ARTICLE XX OF THE 
GATT  1994   
28. The Complainants incorrectly assert that China has failed to demonstrate compliance with the 
chapeau  of Article XX, and that the application of expor t measures results in arbitrary or unjustifiable 
discrimination where the same conditions prevail.  The evidence demonstrates that China has applied 
its export measures in a good faith attempt to meet its objectives of reducing environmental pollution 
and therewith the risk to human, animal, and plant life and health.  China has thoroughly 
demonstrated the close and contemporaneous links between its export measures and its environmental 
policy framework to address pollu tion caused by the production of EPR products.  Additionally, 
China has shown that the export measures materially contribute to, or are apt to contribute to, reduced pollution from EPR products.  Finally, the Complain ants fail to acknowledge that the bulk of the 
burden resulting from China's environmental polici es has been shouldered by domestic industries, 
rather than by foreign importers.   
VII. THE ADMINISTRATION OF CHINA'S WTO-CONSISTENT EXPORT QUOTAS 
A. T
HE BID -WINNING PRICE FALLS OUTSIDE THE SCOPE OF THE OBLIGATION IN 
ARTICLE  VIII:1( A) OF THE GATT  1994 
29. Mexico and the United States challenge, under Article VIII:1(a) of the GATT 1994, China's 
use of auctions as a means for quota allocation, but have abandoned their claim under Paragraph 11.3 
of the Accession Protocol .  They have not rebutted China's demons tration that an auction is the most  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-29 
  
 efficient means of quota allocation, and that WTO law neither a priori  prescribes nor condones any 
means of quota allocation.  The terms of Article V III:1(a) cannot be read as prohibiting auctions as a 
means of quota allocation.  The phrase "in connection with [exportation]" may indicate that 
Article VIII:1(a) applies to a broader category of fees and charges than sole ly those charged at the 
exact moment when the good leaves the territory of  the exporting Member.  However, the sole fact 
that the use of the phrase "in connection with [e xportation]" connotes a broader category of fees and 
charges than those imposed "on exportation" does not contradict China's interpretation. 
30. Apart from the fact that this claim is based  on an inapplicable provision of the GATT 1994, 
China is also surprised by the United States' strong op position to China's use of auctions, in light of its 
own support for the use of auctions outside the contex t of this litigation.  For example, the President 
of the United States has the right to allocate im port licenses through auctions;  the United States 
approves of the use of auctions to allocate parts of the export tariff-rate quota for rice destined for the 
European Union;  and, the United States negotiate s free trade agreements that confirm that WTO-
consistent quota administration may include use of auctions. 
B. C
LAIMS PERTAINING TO THE ELIGIBILITY OF AN EXPORTER FOR QUOTA ALLOCATION  
31. To the extent the Complainants' claims with r espect to eligibility criteria that apply to the 
quotas at issue, whether allocated directly or through bidding, are within the Panel's terms of reference, China notes that the Complainants ha ve failed to address China's rebuttals, except as 
regards the European Union's additional argumen ts concerning the alleged "operation capacity" 
criterion.  In response, China notes, first, that the "operation capacity" re quirement is not applied to 
any of the export quotas on products at issu e in these disputes, because Article 19 of the Measures for 
the Administration of Export Commodities Quotas  does not apply to any of the products at issue.  
Second , 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 contrary to Article X:3(a) of the GA TT 1994.  The European Union argues that the WTO-
inconsistency arises because China has not foreclosed  (but rather "allows") administration that might  
("potentially") be discriminatory.  However, asserting that a Member might  take action that could 
potentially  be WTO-inconsistent, depending on the specific but as-yet-unknown character of that 
action,  is not sufficient to establish a violation. 
C. C
LAIMS PERTAINING TO THE INVOLVEMENT OF THE CCCMC  IN THE DIRECT ALLOCATION OF 
THE QUOTA FOR COKE AND THE ALLOCATION THROUGH BIDDING OF THE QUOTA FOR BAUXITE 
AND SILICON CARBIDE  
32. Mexico and the United States assert that the in volvement of CCCMC in the direct allocation 
of the quota for coke and the allocation through bi dding of the quota for bauxite and silicon carbide 
constitutes partial and unreasonable administration within the meaning of Article X:3(a) of the 
GATT 1994.  China previously rebutted this cl aim by adducing argument and evidence that:  
(i) MOFCOM delegates governmental authority in  the administrative process leading to quota 
allocation, whether allocated directly or through bidding, to the CCCMC Secretariat , and not the 
CCCMC membership ;  (ii) solely the CCCMC Secretariat's Minerals & Metals and Bidding 
Departments play a role in the administrative pro cesses leading to quota allocation, and receive access 
to any documents submitted by exporters wishing to obtain part of the quota for coke, bauxite, and 
silicon carbide;  (iii) no inherent c onflict "averse to the interest of the exporter at issue and foreign 
buyers" exists, because competing exporters and potential customers are not granted access to 
confidential commercial information ;  and, (iv) CCCMC members do not play any role, let alone a 
decision-making role, in the bidding process. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page D-30 
  
 33. Because Mexico and the United States have failed to provide any evidence demonstrating that 
the delegation of certain quota administration t asks to the CCCMC Secretariat has led to, or 
necessarily leads to, a conflict of interest and WTO- inconsistent administration, China is not obliged, 
pursuant to Article X:3(a), to adopt "safeguards"  to ensure that the CCCMC Secretariat remains 
impartial and reasonable.  Nonetheless, as demonstrat ed in previous submissions, effective safeguards 
are in place to ensure that no business confid ential information flows from the CCCMC Bidding and 
Minerals & Metals Departments to its  4,000 members or the general public. 
34. Mexico and the United States also erroneously  argue that because the "chain of command" 
extends from the CCCMC Secretariat employees in the Minerals & Metals and Bidding Departments, 
through several levels of hierarchy, to CCCMC' s 4,000 members, the delegation of certain quota 
administration tasks to the CCCMC Secretariat is irretrievably partial and unreasonable.  China 
submits that the chain of command alleged by Me xico and the United States is based on a false 
premise, which is that a body that meets once ev ery four years dissolves all distinction between 
divisions of the CCCMC Secretariat involved in  quota administration, and the CCCMC's 4,000 
members.  China further notes that the chain of command set out by Mexico and the United States 
lists at least six degrees of separation between the CCCMC Secretariat employees directly involved in 
quota administration, and the CCCMC membership.  Mexico and the United States ask the Panel to 
assume , without any evidence,  that these multiple degrees of separation are of no relevance in 
preventing the transmission of confidential info rmation from the Secretariat employees to the 
CCCMC's 4,000 members.  In addition to examples of  WTO Members' delegation of the exercise of 
regulatory authority to private industry, offered in previous submissions, China provides additional 
examples from the United States and Mexico. 
D. C
LAIM PERTAINING TO CHINA 'S ALLEGED FAILURE TO PUBLISH QUOTAS FOR ZINC  
35. In previous submissions, China already responded that it did not authorize any quota for zinc, 
and, accordingly, China has not omitted to publish the total quota amount and the rules governing the 
allocation of the zinc quota.  As a result, th e European Union's claim under Article X:1 of the 
GATT 1994 is without merit.  
VIII.  CHINA'S EXPORT LICENSE REQUIREMENT  
36. At the outset, China notes that Mexico and the United States have abandoned their claims that 
China's export license requirement is inconsis tent with Paragraphs  162 and 165 of the Working Party 
Report , based on their response to the Panel's Questi on 2, as noted in footno te 77 of the Panel's 
Preliminary Ruling of 1 October 2010. 
A. CHINA 'S EXPORT LICENSE REQUIREMENT IS CONSISTENT WITH ARTICLE XI:1  OF THE 
GATT 1994 
37. Under the proper interpretation of Article XI:1 , China's export licensing requirement does not 
restrict exports.  Whether labelled "automatic" or "n on-automatic", the result under Article XI:1 is the 
same:  an analysis of the relevant measures demons trates that export licenses for the products at issue 
shall be granted within three days, upon receipt of a valid and complete set of application documents, 
a list of which is specified in those measures.  Th e Complainants have failed to establish that China's 
export licensing requirement imposes a limitation on th e quantity of exports, and have therefore failed 
to demonstrate that export licenses for the products at  issue constitute export restrictions within the 
meaning of Article XI:1.    WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-31 
  
 38. The mere fact that an export is subject to a regulatory "condition" does not mean that the 
"condition" violates Article XI:1. In th e case of licensing requirements, the Import Licensing 
Agreement  provides context to identify the dividing line, under Article XI:1, between permissible 
regulation, and regulation that has a quantitative limiting effect.  The very fact that the Import 
Licensing Agreement  disciplines licensing, without prohib iting it, underscores that licensing 
requirements are not a priori impermissible regulation.  The defin ition of "licensing" in Article 1.1 
Import Licensing Agreement offers further relevant context dem onstrating that the requirement of 
valid and complete documentation as a condition for receipt of a license does not convert an otherwise 
valid licensing requirement into a prohibited restriction on the quantity of exports.   
39. China further notes that, as a matter of fact, the Complainants confirm that they have no 
evidence establishing that an export license for the listed products has ever been refused – which 
corresponds with China's showing, in a statement by MOFCOM's Quota & License Administrative Bureau, that export licenses for the listed products ha ve been granted in all cases, and within three 
days, upon the submission of a valid and complete set of application documents. 
B. T
HE EUROPEAN UNION 'S CLAIM REGARDING THE ALLEGED "VERY BROAD AND UNFETTERED 
DISCRETION " OF LICENSE -ISSUING AUTHORITIES UNDER ARTICLE XI:1  OF THE GATT  1994 
40. Contrary to the European Union's allegation,  Chinese license-issuing authorities do not enjoy 
the discretion to apply an undefined "business qualifi cations" criterion for export license applicants.  
Requiring applicants to submit the relevant forms that demonstrate business qualifications enables the 
licensing-issuing authorities to verify whether the a pplicant is qualified and re gistered to do business 
in China, meaning that it is a legal entity, est ablished and recognized under Chinese law, with the 
necessary capacity to undertake business activity.  The license-issuing authority has no discretion to 
decide for itself whether a particular applican t that has presented the business qualifications 
documents lacks business qualifications.     
41. Contrary to the European Union's assertion, nor do Chinese license-issuing authorities enjoy 
the discretion to require an applicant to provide unspecified "other materials" or "documents of 
approval".  Even assuming the European Union ha d demonstrated any discretion to require an 
applicant to provide unspecified "other  materials" or "approval documents" ( quod non ), it has failed to 
demonstrate that such discretion has led to, or wo uld necessarily lead to, WTO-inconsistent conduct.  
The existence of such discretion, on its own, is not WTO-inconsistent.   
42. Assuming the European Union asserts that it is the licensing-issuing authorities who allegedly 
enjoy "very broad and unfettered discretion" to re quire unspecified "other materials" or "approval 
documents" from a particular applicant, it conf ounds alleged discretion of the license-issuing 
authorities to impose unspecified documentary require ments of a specific applicant for a license, with 
the discretion of Chinese legislators and MOFCOM, as the entity issuing implementing regulations 
pursuant to legislative acts, to change the list of export license application documents required of all 
applicants.  Moreover, the European Union has no t cited a single example in which an applicant 
presenting a valid and complete set of applicatio n documents has been de nied a license for the 
covered products.  Assuming the European Unio n is challenging the legislative and regulatory 
discretion to change the list of documents required of  all applicants for export licenses, China fails to 
see how this "discretion" could possibly constitute a limit on the quantity of exports.  The "failure" to 
foreclose the discretion to change domestic law doe s not constitute a violation of WTO obligations, 
including Article XI:1. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page D-32 
  
 IX. THE ADMINISTRATION OF CHINA' S EXPORT LICENSE REQUIREMENT 
A. T
HE EUROPEAN UNION 'S ARTICLES X:1 AND X:3( A) CLAIMS REGARDING EXPORT LICENSING 
FALL OUTSIDE THE PANEL 'S TERMS OF REFERENCE  
43. The European Union claims under Articles X:1 and X:3(a) of the GATT 1994 regarding 
export license administration are not within the Panel's terms of reference.  In Section III of its Panel 
Request, the European Union incl uded clear claims under those provisions concerning other issues, 
but not concerning export licenses.  For reasons identical to those underlying the Panel's decision, at paragraphs 74 to 77 of its Prel iminary Ruling of 1 October 2010, to exclude from its terms of 
reference the European Union's publication claim re garding the coke quota, the Panel must exclude 
from its terms of reference the European Union's claims under Articles X:1 and X:3(a) regarding 
export license administration. 
B. A
RTICLE X:1 OF THE GATT  1994  DOES NOT OBLIGE CHINA TO PUBLISH REGULATIONS AND 
ADMINISTRATIVE RULINGS OF GENERAL A PPLICATION THAT DO NOT EXIST UNDER CHINESE 
LAW 
44. In response to the European Union's Article XI :1 claims regarding the publication of certain 
Chinese measures, China previously responded that:  (i) the list of documents to be submitted is 
publicly available in Chapter II of the Measures for the Administration of Licenses for the Export of 
Goods , aptly titled "Documents to be submitted for the application of Export Licenses" (Exhibit 
CHN-342);  (ii) the list of documents to be submitte d, for exports of unwrought zinc and manganese, 
is publicly available in the 2010  Catalogue of Goods Subject to Export Licensing Administration  
(Exhibit CHN-7);  (iii) the list of document relied  upon to examine "whether the operator has business 
qualification" is publicly ava ilable in Article 6 of the Working Rules on Issuing Export Licenses Rules  
(Exhibit CHN-344);  and, (iv) the so-called "documen ts of approval of the Ministry of Commerce" 
required to obtain export licenses for exports of  unwrought zinc and manganese are published in the 
2010 Catalogue of Goods Subject to Export Licensing Administration .   
C. THE EUROPEAN UNION 'S CLAIM UNDER ARTICLE X:3( A) OF THE GATT  1994  LACKS MERIT  
45. China has previously objected that the European Union has fa iled to provide any evidence of 
the application  of this alleged "broad discretion", any evidence that such application constituted 
WTO-inconsistent administration, or any evidence  establishing that this "broad discretion" will 
necessarily  lead to WTO-inconsistent administration.  Moreover, to the extent the European Union 
considers the requirements for export license applican ts to provide documents and furnish evidence of 
their qualification to do business are in and of th emselves 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).  Additionally, Chin a demonstrated that the European Union has not 
stated a prima facie claim of violation of Article X:3(a), because asserting that a Member might  take 
action that could potentially , depending on the specific but as-yet- unknown character of that action,  
violate Article X:3(a), is not sufficient to establish a violation of that provision. 
46. The sole new argument made by the European Union is an assertion that "China accepts … 
that the export license issuing agencies have the discretion to reject applicants that do not posses 
'business qualifications'".  This is incorrect.  Ch ina stated that the licensing-issuing authorities may 
only reject an application that does not include the "business qualification" documents specifically 
enumerated in Article 6 Working Rules on Issuing Export License .  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-33 
  
 X. CLAIMS RELATING TO CHINA'S ALLEGED MEP REQUIREMENT, AND ITS 
ADMINISTRATION 
47. Following the Panel's Preliminary Ruling of 1 October 2010, the Panel' s terms of reference 
are limited to six MEP-related measures. Out of these six alleged MEP-related measures, two 
measures have been formally repealed and two othe r measures have been replaced.  As a result, the 
Panel may not make recommendations regarding these expired measures; and findings with respect to 
expired measures would serve no purpose.   
48. In any event,  none of the alleged MEP-related measures th at is within the Panel's terms of 
reference imposes an MEP requirement or violates Article XI:1 of the GATT 1994. The Complainants 
have failed to provide any evidence to demons trate that China has engaged in export price 
coordination since May 2008.  China also reiterates th at when asked by the Panel to substantiate their 
claims and provide evidence, none of the Compla inants adduced any evidence to rebut China's 
evidence, provided in Exhibits CHN-361, CHN-362, and CHN-363.  This failure to submit evidence 
is explained solely by the fact that China has abandoned export price coordination. 
49. Finally, China notes that the CCCMC Charter  (i) does not concern the administration of a 
non-existing MEP requirement for yellow phosphorus in a manner that is inconsistent with 
Article X:3(a) of the GATT 1994;  and, (ii) is pub licly available, even assuming that it is a measure 
requiring publication, pursuant to Article X:1 of the GATT 1994. 
 WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page D-34 
  
 ANNEX D-5 
 
EXECUTIVE SUMMARY OF THE OPENIN G ORAL STATEMENT OF CHINA  
AT THE SECOND SUBSTANTIVE MEETING 
  
I. THE PANEL SHOULD MAKE FINDINGS AND RECOMMENDATIONS ON THE 
2010 MEASURES 
1. The prompt and effective resolution of these disputes requires findings and recommendations 
on the 2010 measures, which currently apply.  There is no question that the Panel has jurisdiction to 
make findings and recommendations regarding th e 2010 replacement measures, including measures 
that prolong and/or adjust th e product category of the 2009 measures and measures that were 
expressly listed by name in the Compla inants' panel requests.  The Panel can, but should not , make 
findings on the 2009 measures that were withdrawn and not replaced, and, in any event, the Panel 
cannot  make recommendations regarding the 20 09 measures that have ceased to exist . 
2. The European Union also asks the Panel to reco mmend that China repeal the legal basis to 
impose measures that China is permitted, in cer tain circumstances, to impose under the covered 
agreements.  There is no basis in the covered agreements, or indeed in common sense, to deny a 
Member, in advance and under all circumstances, th e legal basis for exercising its right to apply 
quotas and duties consistently with or jus tified under the covered agreements.    
II. CHINA'S REQUEST THAT THE PANEL EXERCISE JUDICIAL ECONOMY WITH 
RESPECT TO CERTAIN CLAIMS MADE UNDER THE ACCESSION PROTOCOL  
AND THE WORKING PARTY REPORT    
3. The Complainants challenge the consistency of  certain measures on the products at issue, 
such as export quotas and export license requirements, under the GATT 1994 as well as the Accession 
Protocol  and the Working Party Report .  If these measures are found to be inconsistent with the 
GATT 1994, China requests that the Panel exercise j udicial economy with respect to the claims made 
under corresponding obligations under the Accession Protocol  and the Working Party Report .  
Contrary to the European Union's suggestion, there is no textual basis for requiring that a panel demonstrate "exceptional circumst ances" before properly exercising judicial economy.  Instead, a 
panel may decline to make a finding on the WTO- inconsistency of a measure with a particular 
provision, where doing so is unnecessary to assist the DSB in making recommendations and rulings to resolve the dispute.
1   
III. THE EXPORT QUOTA O REFRACTORY BAUXITE IS NOT INCONSISTENT 
WITH ARTICLE XI OF THE GATT 1994 AND PARAGRAPHS 162 AND 165 OF 
THE WORKING PARTY REPORT  
A. THE PROPER INTERPRETATION OF ARTICLE XI:2( A) OF THE GATT  1994 
4. The word "essential" should be read in light of the immediate context of the phrase "for the 
exporting [Member]", such that considering essentialness may involve assessing the quantitative 
                                                      
1 Appellate Body Report, US – Zeroing (EC) , para. 147;  Appellate Body Report, Lamb – Safeguards , 
paras. 189 to 195;  Panel Report, Japan – Apples , para. 8.303;  Panel Report, EC – Sardines , paras. 7.147 to 
7.152;  Panel Report, China – Publication and Audiovisual Products , paras. 7.378, 7.417, 7.706, 7.1412, and 
7.1428.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-35 
  
 contribution of the product throughout the particular Member's entire value chain, as well as 
qualitative criteria capturing the importance of the product for that Member. The broader context of 
the term "essential", which includes Article XXXVI:5 of the GATT 1994, Paragraph 4 of the BOP 
Understanding , and the drafters' agreement on the applicati on of Article XI:2(a) to Australia's export 
ban on merino sheep, also supports this interpretation.   This interpretation of Article XI:2(a) does not 
affect the meaning of Article XX(i), because Article XX(i) only applies in very particular 
circumstances in principle not implicated by Article XI:2(a).  That a given set of facts may satisfy the 
requirements of both Articles XI:2(a) and XX(i) does m ean that one or the other provision is deprived 
of an effective interpre tation or rendered redundant.
2 
5. The phrase to "prevent or relieve", read w ithin its immediate context, means that 
Article XI:2(a) applies to anticipatory  export prohibitions or restrictions, taken to prevent the 
occurrence of a critical shortage, and demonstrates that a shortage can be foreseen .  The use of the 
verb "to prevent" shows that a Member may find it necessary to take action, based on objective 
considerations, to address the risk, uncertainty, or  fear that a shortage will become critical.   
6. Article XI:2(a) also requires that the export rest riction be "temporarily applied" in the sense 
that the permissible duration be defined in relation to the achievement of a stated goal – to prevent or 
relieve a critical shortage.  No absolute threshol d for the temporal limitation or bounding applies.   
7. Additionally, Mexico and the United States cons ider that export restrictions on exhaustible 
natural resources are a priori  excluded from the scope of Article XI:2(a).  This line of argument 
appears to rest entirely on the misguided assumption that the only cause of a critical shortage of an 
exhaustible natural resource is that resource's e xhaustibility.  The Complainants overlook that a 
critical shortage of an exhaustible natural resource is likely to be caused by a number of factors, of 
which exhaustibility is but one. 
B. THE EXPORT QUOTA ON REFRACTORY BAUXITE IS NOT INCONSISTENT WITH ARTICLE XI:1  OF 
THE GATT  1994   
8. China has demonstrated that the export quota on refractory bauxite is temporarily applied to 
prevent or relieve a critical shortage of this essen tial product.  Refractory bauxite, defined according 
to the physical and chemical char acteristics agreed upon by the Parties and their experts, is the 
product covered by China's arguments  under Article XI:2(a).  Refractory bauxite is essential to China 
because, contrary to the Complainants' assertions, it is  not readily substitutable, as it features specific 
technical (physical and chemical) and economic properties.  China also demonstrates that it is 
experiencing a critical shortage of refractory bauxite and risk thereof due to a range of factors, of 
which limited available reserves is but one.  Dr Humphreys' criticality assessment confirms this 
conclusion.  Moreover, data cited by the Complain ants and their expert do not establish the alleged 
increase of China's production or export of refractory materials produced from refractory bauxite, and 
are based on erroneous assumptions.  
IV. THE AVAILABILITY OF ARTICLE XX OF  THE GATT 1994 IN DEFENSE OF A 
CLAIM UNDER PARAGRAPH 11.3 OF THE ACCESSION PROTOCOL  
9. China can, like any other WTO Member, regulat e trade using export duties for legitimate 
objectives recognized under Article XX of the GATT 1994, provided it complies with obligations 
attaching to Article XX.  Numerous provisions of the covered agreements, including the Preamble to 
                                                      
2 See Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 99;  see also  
Appellate Body Report, US – Zeroing (Japan) , para. 133. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page D-36 
  
 the WTO Agreement , reflect the basic principle that the inte rnational trade obligations Members have 
assumed do not prevent them from taking measures to promote other fundamental societal interests 
recognized in the covered agreements.  The text of the Accession Protocol  and the Working Party 
Report  confirms that this balance is maintained in the WTO obligations that China has assumed.  In 
particular, Paragraph 170 of the Working Party Report  confirms that China may impose export duties 
conforming to WTO disciplines.   
10. The European Union complains that China's reliance on Article XX is based on "nebulous 
references to a mingle-mangle of political instrument s and statements made outside of the WTO".  
The European Union makes this complain t in addressing China's argument about the availability of 
Article XX , though China relies on the supposedly "nebulous" "mingle-mangle" of instruments in 
showing, as a matter of substance, that its measures conform fully to the disciplines of Articles XI and 
XX.  In any event, China regrets th e European Union's dismissive appr oach to customary international 
law, the Preamble to the WTO Agreement , and the text of Article XXXVI:5 of the GATT 1994, all of 
which are relevant means of interpretation r ecognized under customary principles of treaty 
interpretation. 
11. Finally, WTO Members cannot be presumed to have abandoned their "inherent right" to 
regulate trade in a manner that promotes conserva tion and public health.  If China had consented to 
abandoning  its " inherent " right to regulate trade in this way, it would have done so through explicit 
language in the text of the Accession Protocol .  The Panel and the Complainants need not fear that 
China will escape its uniquely onerous obligations rega rding export duties if Article XX applies.  To 
the contrary, while other Members can use export duties without justification, China alone must 
demonstrate that its export duties are applied consis tently with the obligations in Article XX.   
V. THE EXPORT RESTRAINTS APPLIED TO REFRACTORY BAUXITE AND 
FLUORSPAR ARE JUSTIFIED PURSUANT TO ARTICLE XX(G) OF THE 
GATT 1994 
A. T
HE PROPER INTERPRETATION OF ARTICLE XX( G) OF THE GATT  1994 
12. The phrase "relating to conservation" in Article XX(g) means that measures must have an 
objective and discernible connection to the cont rol and management of supply and use of non-
renewable natural resources that are exploited commercially.  The second element of Article XX(g) 
requires that the measures be made effective in c onjunction with restrictions on domestic consumption 
or production.  The burden put on foreign and dom estic consumption need not be identical.  The WTO 
Agreement is not a commodity-sharing agreement;  reliance on Article XX(g) does not compel the 
equitable sharing of natural resources subject to conservation measures.   
13. When dealing with an export restriction, the requirement in the chapeau  of Article XX of no 
"arbitrary or unjustifiable discrimination" means that the respondent cannot discriminate between 
different importing Members, unless relevant differences exist between the importing Members that 
justify the differential treatment.  In order to avoid a charge of discrimination, China is not compelled 
to ensure that other WTO Members have an equa l or non-discriminatory share of China's natural 
resources.  Regarding the requirement of no "disgui sed restrictions on international trade", when a 
measure pursues policy goals that are expressly recogni zed by the covered agreements, its application 
does not give rise to any restrictions on trade that can be regarded as an "abuse" of WTO rights.    WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-37 
  
 B. T
HE APPLICATION OF ARTICLE XX( G) TO THE EXPORT RESTRAINTS  ON REFRACTORY BAUXITE 
AND FLUORSPAR  
14. China's export restrictions applied to refractor y bauxite and fluorspar relate to conservation 
because they, together with other measures formin g part of China's mineral resources conservation 
policy, ensure that the limited supplies of these r esources are used efficiently over time, by industries 
that are properly adapted to the available supply, with a view to conserving the resources over time.  The combined effect of the export restraints a nd extraction caps restricts domestic production, and 
domestic and international consumption, of these r esources.  Moreover, China has met its burden of 
proving, on a prima facie  basis, that these measures are applied consistently with the chapeau  of 
Article XX. 
VI. THE EXPORT RESTRAINTS APPLIED TO NON-FERROUS METAL SCRAP 
PRODUCTS AND EPR PRODUCTS ARE JUSTIFIED PURSUANT TO ARTICLE XX(B) OF THE GATT 1994 
15. The export restraints' objective to reduce and prev ent risks to human, animal, and plant life or 
health resulting from pollution generated by  the production of EPR products is not a post hoc  
rationalization.  Numerous Chinese measures establish an explicit link between the export tariffs, and 
the expressed objective.  The fact that one effect  of export restraints on EPR products is to foster the 
growth of higher-value-added and less polluting do wnstream industries is unavailing.  China has 
established that the export measures on EPR products make a material contribution today and are apt 
to make a material contribution in the future.  Ample evidence demonstrates that many alternative 
measures are already in place to curb pollution connected with EPR production.   
16. The objective of export restrictions on metal scrap products is to replace  to the maximum 
amount possible  secondary production for primary metals  produciton, because secondary production 
entails significant environmental and, consequently, health benefits.  The export duties, part of a 
broader comprehensive regulatory recycling framework, ensure that, once liberated and collected, 
supply of the metal scrap products at issue is ava ilable to the nascent Chin ese recycling industry.   
VII. THE ADMINISTRATION OF CHINA'S WTO-CONSISTENT EXPORT QUOTAS  
17. China asks the Panel to reject th e claim that the use auctions to  allocate quotas is inconsistent 
with Article VIII:1(a) of the GATT 1994.  China reiterates that, in no provision of the covered 
agreements, have WTO Members agreed to outlaw the use of auctions.  To the contrary, WTO 
Members have agreed in Article XIII:2 of the GA TT 1994 that quotas should be allocated in the least 
trade-distorting manner. 
18. The Panel should also reject the European Union's claim under Article X:1 regarding the 
alleged failure to publish the quotas for zinc ores an d concentrates.  China has published notice that 
these products can only be exported if a quota is secu red.  China has not opened a quota amount and, 
thus, there are no further general rules that could be published.    
19. China further submits that the Complainants err in their interpretation of the legal standard 
under Article X:3(a).  A claim under Article X:3(a)  "must be supported by solid evidence", which 
"should reflect the gravity of the accusations inherent in [the] claims".
3  In the absence of evidence of 
                                                      
3 Appellate Body Report, US – OCTG Sunset Reviews , para. 217. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page D-38 
  
 specific instances of WTO-inconsistent administrati on, solid evidence must show that the measure 
"necessarily leads to " WTO-inconsistent administration.
4   
20. Mexico and the United States have failed to demonstrate that the CCCMC's involvement in 
quota administration presents an inherent conflict of interest that necessarily results in partial and 
unreasonable administration.  In any event, China h as shown that effective safeguards ensure that no 
confidential information flows from the Bidding Depa rtment and Minerals & Metals Department to 
the CCCMC's 4,000 members or the general public. 
21. The European Union's Article X:3(a) claim that the "operation capacity" criterion under 
Article 19 of the Measures for the Administration of Export Commodities Quotas  must also fail, 
because the criterion is not applied to the products  at issue, and because the European Union has 
provided no evidence of a single instance in wh ich the alleged danger or possibility of WTO-
inconsistent administration has materialized.  Th e European Union has also not provided evidence 
showing that, under Chinese law, this term must be interpreted such that it compels WTO-inconsistent 
action by Chinese authorities.  In those circumstan ces, China is due the same presumption of good 
faith performance of its obligations under Artic le X:3(a) that is accorded to all Members.5 
22. The claims pertaining to quota eligibility must also be rejected.  Given that Paragraph 5.1 of 
the Accession Protocol  is without prejudice to China's right to  adopt quotas in certain circumstances, 
it follows necessarily that this provision is also without prejudice to the adoption of rules enabling 
quota allocation.  Whatever the content of such quot a allocation rules, China's obligations are without 
prejudice to these rules.  If China were not entitled to  adopt quota allocation rules, this would entirely 
frustrate its right to regulate trade throug h quotas expressly preserve d in Paragraph 5.1. 
23. Regarding the European Union's claim under Paragraph 5.2 of the Accession Protocol , and 
Paragraphs   84(a) and 84(b) of the Working Party Report , China refers to the list in Exhibit JE-82. 
VIII.  CHINA'S EXPORT LICENSE REQUIREMENT AND ITS ADMINISTRATION  
24. The Complainants allege that the export licen ses for coke, bauxite, silicon carbide, zinc, and 
manganese are not issued automatically, but acknowle dge that they have no evidence that an export 
license for the listed products has ever been refused .  This confirms China's showing, based on the 
explicit text of the relevant Chinese measures, that  export licenses for the listed products are granted 
in all cases, and within three days, upon the submis sion of a valid and complete set of application 
documents.   
25. The European Union has also failed to establis h that China's export license requirement is 
discretionary and, for this reason, inconsistent with  both Articles XI:1 and X:3(a).  In any event, the 
European Union's Article X:3(a) claim falls outside  the Panel's terms of reference.  Even assuming 
that the European Union had demonstrated that Ch inese license-issuing authorities have discretion to 
require unspecified "other materials" ( quod non ), it has not explained why the existence of this 
discretion violates Articles XI:1 or X:3(a).  In this dispute, the alleged discretion can be exercised in a 
WTO-consistent manner; in those circumstances, China is due the same presumption of good faith 
                                                      
4 Appellate Body Report, EC – Selected Customs Matters , paras. 201 and 226; Panel Report, Argentina 
– Hides and Leather , paras. 10.11, 11.100, and 11.101; Panel Report, Thailand – Cigarettes (Philippines) , 
para. 7.906. 
5 Appellate Body Report, US – OCTG Sunset Reviews , para. 173; Appellate Body Report, US – Section 
211 Appropriations Act , para. 259; Appellate Body Report, Chile – Alcoholic Beverages , para. 74.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-39 
  
 performance of its obligations that is accorded to all Members.
6  The European Union also alleges that 
China violates Articles XI:1 and X:3(a) by "not remov[ing] permanently" MOFCOM's discretion to 
amend, for future applicants, the list of goods subject  to the export license re quirement, or the list of 
documents required to support an application.  The existence of such "discretion" on the part of the 
legislator or regulator does not contravene China's WTO obligations; again, China is due the presumption of good faith performance of its obligations.   
26. Finally, the European Union's claim under Article X:1 regarding the publication of export 
license measures falls outside the Panel's terms of refe rence and, in any event, lacks merit, because all 
of China's general rules concerning export licen sing have, as a matter of fact, been published. 
IX. CLAIMS RELATING TO CHINA'S ALLEGED MEP REQUIREMENT 
27. The Complainants have not formulated any ne w rebuttal arguments regarding their claims 
under Articles XI:1, X:1, and X:3(a) regarding an alleged MEP requirement and its administration.  
Therefore, China refers the Panel to its second written submission, setting out China's arguments 
regarding the claims made with respect to the si x MEP-related measures fall ing within the Panel's 
terms of reference. 
                                                      
6 Appellate Body Report, US – OCTG Sunset Reviews , para. 173; Appellate Body Report, US – Section 
211 Appropriations Act , para. 259; Appellate Body Report, Chile – Alcoholic Beverages , para. 74. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page D-40 
  
 ANNEX D-6 
 
EXECUTIVE SUMMARY OF THE CLOSIN G ORAL STATEMENT OF CHINA  
AT THE SECOND SUBSTANTIVE MEETING 
 
 
I. THE PROPER INTERPRETA TION OF ARTICLE X OF THE GATT 1994 
1. China's first set of remarks concerns the Co mplainants' misguided approach to the legal 
standard and evidence required unde r Article X of the GATT 1994. To be gin, China fails to see how a 
complainant can substantiate a claim of violati on without "solid evidence", as the United States 
argued in its opening statement yesterday with respect to claims under Article X:3(a).
1  In no case is a 
complainant liberated from the requirement to provid e "solid evidence" to establish a claim.  This 
Panel, like all panels, must insist on solid eviden ce in support of a claim under any provision of the 
covered agreements.  
2. Moreover, as the European Union has noted, a co mplainant is entitled to bring different types 
of claims under Article X:3(a).  First , it may raise a claim concerning instances of application of a 
measure covered by Article X:1 in a manner that  constitutes WTO-inconsistent administration.  
Second , it may challenge "the substantive content of a legal instrument that regulates the 
administration of a legal instrument of  the kind described in Article X:1",2 or "[t]he features of an 
administrative process that govern the application of a legal instrument of the kind described in 
Article X:1".3  The European Union's Article X:3(a) clai ms against the "operation capacity" criterion 
in the context of quota administration, as well as th e "very broad and unfettere d discretion" allegedly 
retained by Chinese authorities under certain expor t license-related measures, are of necessity 
examples of the second type of challenge – for the si mple reason that the European Union has offered 
no evidence concerning any instances in which the "operation capacity" criterion and/or "very broad 
and unfettered discretion" have been applied.   
3. The European Union proposes that, in the case of  this second type of Article X:3(a) challenge, 
it need only show that the "operation capacity" crite rion and/or the alleged "v ery broad and unfettered 
discretion" " are likely to cause  the non-uniform application of the legal instrument at issue",4 or that 
they raise the "possibility" or "danger" of WTO-inconsistent administration.5   
4. This in an improper reading of Article X:3(a) .  As underscored by the Appellate Body in EC – 
Selected Customs Matters , the European Union must instead demonstrate that the "operation capacity" 
criterion and/or the alleged "very broad and unfettered discretion" will, if applied, "necessarily lead 
to" WTO-inconsistent administration.6  In this dispute, the European Union has not established that 
the "operation capacity" criterion or the allege d "very broad and unfettered discretion" will 
"necessarily lead to" WTO-inconsistent administ ration.  Instead, because China may apply the 
"operation capacity" criterion or the alleged "v ery broad and unfettered discretion" in a 
                                                      
1 US' opening statement of 22 November 2010, paras. 116 and 117; see also Mexico's opening 
statement of 22 November 2010, para. 2. 
2 Appellate Body Report, EC – Selected Customs Matters , para. 200. 
3 Appellate Body Report, EC – Selected Customs Matters , para. 225. 
4 EU's opening statement of 22 November 2010, para. 37 (original emphasis). 
5 EU's second written submision, paras. 119 and 120. 
6 Appellate Body Report, EC – Selected Customs Matters , paras. 201 and 226.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-41 
  
 WTO-consistent manner, China is due the same  presumption of good faith performance of its 
obligations under Article X:3(a) that is accorded all Members.
7  
II. AUCTIONS ARE NOT INCONSISTENT WI TH ARTICLE VIII OF THE GATT 1994 
5. China now turns to the United States' clos ing remarks regarding Article VIII of the 
GATT 1994.  The United States argues that the bid-winning price is a fee or charge imposed on or in connection with exportation and, therefore, is inconsistent with Article VIII.   
6. The first interpretive question is whether the phrase "on or in connection with exportation" 
applies to a bid-winning price. In China's view, this phrase refers to fees or charges that have a 
sufficiently proximate connection to exportation , which is not the case for the bid-winning price. 
Through bidding, potential exporters obtain a right to  export. However, at that stage, the bidder has 
not entered into a contract to export or even deci ded to export.  The bidding process simply confers a 
right to undertake further steps that may lead to exportation;  however, expor tation may never occur.  
The bid-winning price is, therefore, insufficiently proximate to exportation to be imposed "on or in 
connection with exportation". 
7. This is confirmed by China's evidence, which shows that the bid-winning fee does not reduce 
the volume, or increase the price, of exports.
8  China recalls that the evidence demonstrates that 
auctions are one of the least trade-distorting means of quota allocation. Auctions are, therefore, consistent with Article XIII:2 of the GATT 1994,  which "stipulates a principle regarding the 
distribution of the tariff quota in the least trade-distorting manner ".
9  Article VIII cannot be read in a 
manner that would prevent WTO Members from using one of the least trade-distorting quota 
allocation methods as it would run counter to Article XIII:2.   
8. Moreover, the bid-winning price is also not a "fee or charge" "imposed" by the government.  
The price reflects the value that a bidder has c hosen to attach to the right to export.  
III. CHINA'S DEFENSES UNDER ARTICLE XX OF THE GATT 1994 
9. China now turns to a few remarks on its defens es under Article XX.  The Complainants seem 
to make an issue of the fact that China does not  offer a defense for each export quota and export duty 
at issue.  However, China has avoided bringing fri volous defenses.  Instead, China pursues defenses 
that it considers are warranted by the law and the facts.   In an effort to resolve this dispute promptly, 
China asks the Panel to consider these defenses carefully. 
10. In its closing statement, Mexico recognized the right of all WTO Members to adopt 
environmental policies, but it stressed that these po licies must be adjusted as necessary to meet WTO 
rules, and that WTO rules should not be adjusted to fit domestic policies.  China fully agrees.  Indeed, 
in the past decade, China has made  very significant efforts to adjust  its domestic policies to the needs 
of WTO rules. 
11. In this dispute, although Mexico argues that dom estic policy must be adjusted to meet WTO 
rules, the Complainants nonetheless accuse China of "manipulating" its conservation policy to meet 
                                                      
7 Appellate Body Report, US – OCTG Sunset Reviews , para. 173; Appellate Body Report, US – Section 
211 Appropriations Act , para. 259;  Appellate Body Report, Chile – Alcoholic Beverages , para. 74. 
8 Exhibit CHN-306: Expert Statement by Professor M. Olarreaga on Export Quota Auctions as Optimal 
Allocation Mechanisms  (July 2010);  see also  Exhibit CHN-463:  USDA, Economic Analysis of TRQ 
Administrative Methods (TB-1893). 
9 Appellate Body Report, EC – Bananas III (21.5 – US) , para. 338. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page D-42 
  
 the WTO rules at issue in this dispute.
10  It is true that China's conservation policy continues to 
evolve.  However, the changes in question were not made for purposes of this dispute. China's 
conservation policy was first introduced in 1986.11  Like many other countries, it has adjusted its 
policy progressively, making it more stringent over ti me.  This is not long-term "manipulation", but 
instead recognition that additional st eps need to be taken.     
12. On 31 December 2008, and thus befo re consultations in this di spute, China strengthened its 
conservation policy by adopting the Mineral Resources Plan (2008-2015) , which, inter alia , 
envisaged the imposition of extraction and production caps.12  The introduction of extraction and 
production caps was not, therefore, fabricated for these disputes, but was part of a process of 
enhancing China's conservation policy.  The fact th at caps were introduced with effect from 1 January 
2010 was, therefore, in implementation of a pre-existing policy, and was not fabrication.13 
13. Contrary to the Complainants' suggestion, these are not challenged measures that must form 
part of the Panel's terms of reference.  Instead , they are evidence in assessi ng China's defenses.  The 
fact that some of these measures post-date the Pa nel's establishment does not preclude the Panel from 
taking them into account as evidence.  China notes that, in Brazil – Retreaded Tyres , for example, the 
panel relied on evidence that came into existen ce during the panel proceedings for purposes of an 
Article XX(b) defense.  The Appellate Body rejected  the European Union's a ppeal that this evidence 
should have been rejected because of its timing.  The Appellate Body confirmed that "[i]t is well 
settled that a panel may consider a piece of  evidence that post-dates its establishment".14   
14. In making its objective assessment, with a view to settling this dispute promptly, the Panel 
cannot ignore any fact before it, including evid ence regarding the extraction and production caps on 
refractory bauxite and fluorspar.   
IV. THE LACK OF TEXTUAL BASIS FOR THE COMPLAINANTS' CLAIMS, UNDER 
ARTICLE XX(G) OF THE GATT 1994, TO A SHARE OF CHINA'S NATURAL 
RESOURCES 
15. China closes with some remarks on the Complain ants' attempts to secure a share of China's 
natural resources – an issue that lies at the heart of th is dispute.  In its closing statement, the European 
Union complained that China wrongly stat es that the Complainants seek "equitable access " to, or an 
"equitable share " of, China's mineral resources.  Instead, it says that it seeks "equitable treatment " by 
China.15  China does not understand what the European Union means by "equitable treatment ", as 
opposed to "equitable access " or an "equitable share ".  
                                                      
10 US' closing statement of 23 November 2010, para. 19. 
11 See further  China's first written submission, para. 167. 
12 Exhibit CHN-80:  Notice of the Ministry of Land and Resources on Promulgating and Implementing 
the National Mineral Resources Plan (2008-2015) , Section IV (II).   
13 See Exhibit CHN-87:  2010 Circular of the General Office of the State Council on Taking 
Comprehensive Measures to Control the Extraction and Production of Refractory-Grade Bauxite and 
Fluorspar ;  Exhibit CHN-97:  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 , Articles I 
and III(V);  Exhibit CHN-98:  Circular on Passing Down the Controlling Quota of the 2010 Total Production 
Quantity of High-alumina Refractory-Grade Bauxite and Fluorspar , Article VI.  The caps are stated to apply for 
the entire year and have been so applied.   
14 Appellate Body Report, Brazil – Retreaded Tyres , para. 193. 
15 EU's closing statement of 23 November 2010, para. 23.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page D-43 
  
 16. In any event, the European Union has argued that it does seek "equitable access" to China's 
natural resources. For example, in its second writte n submission, it stated that "Article XX(j) … 
affirms the principle of  equitable access  that is  addressed by the requirement in Article XX(g)  that a 
measure that relates to conservation must be ' made effective in conjunction with restrictions on 
domestic production or consumption '".16 
17. China has already mentioned earlier today that th e United States also asserts an entitlement to 
access to China's natural resources.  It  recalls that the Preamble to the WTO Agreement  refers to: 
" 'the world's resources' – as opposed to a particular Member's resources.  The 
Preamble thus speaks to the shared need of  all Members to have access to the trade in 
those resources."17 
18. Thus, for the United States, this Preamble tran sforms each Member's own natural resources 
into shared resources belonging to all Members under a commodity-sharing agreement.  It adds that a 
resource-endowed Member cannot "leverage its ac cess to natural resources … to the detriment of 
other Members' access".18  The United States also said that Article XX(g) raises the "complex 
question … as to whether the relative amounts [of a na tural resource] made available to the domestic 
and foreign markets corresponde d in an even-handed way to their relative demands ", emphasizing 
that access is driven by " demand ".19 
19. To be clear, China and other WTO Members ha ve not agreed, in acceding to the WTO, to 
grant the Complainants an equitable share of th e natural resources located within their respective 
territories, much less have they granted the Complain ants a share of those resources that is determined 
by the "demand" of the Complainants' domestic industries.   
20. The text of Article XX(g) does not enshrine – to borrow the European Union's word – any 
"principle" of equitable access to natural resources derived from Article XX(j) or elsewhere.  Article XX(j) establishes "the principle that all Members are entitled to an equitable share of the 
international supply " of products.  This provision does not affirm an alleged prin ciple of "an equitable 
share of all supply ", including domestic and international su pply – which is what the Complainants 
seek.  Instead, the provision establishes that Me mbers are entitled to "an equitable share" of the 
portion of "supply " made available for "international " markets .  In this dispute, China offers all WTO 
Members an equitable and non-discriminatory share of the " international supply " of its natural 
resources. 
 
_______________ 
 
  
                                                      
16 EU's second written submission, para. 254 (emphasis added) (original underlining). 
17 US' opening statement of 22 November 2010, para. 70. 
18 US' opening statement of 22 November 2010, para. 72. 
19 US' opening statement of 22 November 2010, para. 93.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-1 
  
 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 pa rty 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 the first substantive meeting  E-16 
E-8 Executive Summary of written submissi on 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 WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-2 
  
 ANNEX E-1 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY SUBMISSION  
OF ARGENTINA 
  
I. INTRODUCTION 
1. Argentina has expressed the wish to participat e as a third party in these proceedings as this 
case concerns the interpretation of central provisions of the GATT 1994, in particular in relation to the 
use of export duties as a trade policy instrument.  It  also wishes to take a stand opposing the idea that 
the criteria applicable to this issue can be reinte rpreted as a result of specific provisions in accession 
agreements.  To allow more efficient use of the tim e available, this submission will focus on the use 
of export duties under WTO rules in the light of Articles I, II, VII, VIII, X and XI of the GATT 1994. 
II. LEGAL ARGUMENTS 
A. G
ENERAL PRINCIPLES CONCERNING EXPORT DUTIES  
2. Much has been said and written about the na ture and practice of export duties in the 
GATT acquis prior to the Uruguay Round.  It should ne vertheless be pointed out that Argentina, along 
with Bangladesh, Brazil, China, Cuba, Ecuador, Gu atemala, India, Indonesia, Kenya, Malaysia, 
Paraguay, the Philippines and South Africa, clarif ied in document JOB(04)/110 that no mandate was 
received from the Ministers in Doha to include th e issue of export taxes in the negotiating process. 
3. In order to understand how most Members inte rpret the legitimacy of export duties, it should 
be borne in mind that this instrument does not even  feature on the Doha Round agenda.  Furthermore, 
the proposals tabled by Switzerland and Japan for the inclusion of an analysis of such duties after the 
negotiating groups on both agriculture a nd NAMA were established were rejected. 
4. On the other hand, in document JOB(04)/110, the above-mentioned countries confirmed that 
export taxes are essential policy instruments and that nine out of ten Members applying these 
instruments are developing countries, for the following reasons: 
 "First, because export duties constitute an important and reliable source of revenue.  
It is also an instrument which can easily be invoked and administered; 
 
 second, to reduce dependence on the export of commodities which are subject to 
volatile price fluctuations that have a direct impact on the income and livelihood of 
farmers and rural population.  Also, it helps to promote downstream processing industries in a context of tariff escalation a pplied by major importing countries;  and 
 
 third, for food security reasons, to p revent shortages of primary products and to 
address unfair redistribution of rents in cases of exchange rate distortions". 
 B. E
XPORT DUTIES AS A MEASURE LEGITIMIZED UNDER WTO  RULES  
5. It should be noted that, as a general prin ciple, a ban on prohibitions and quantitative 
restrictions on exports has been imposed within the GATT/WTO legal order, more specifically in 
Article XI:1 of the GATT 1994, the text of which expressly refers to quantitative restrictions.  A 
contrario sensu , Article XI:1 does not establish any specificati ons with regard to export duties.  It can  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 therefore be concluded that this provision is based on the view that border customs duties (tariffs) are 
more transparent, predictable and less trade-distor ting trade measures than quantitative restrictions on 
imports or exports.  Having rega rd to the above, the GATT contains Articles which specifically refer 
to export duties.  It follows that the duties app lied by developing countries to their exports are 
expressly permitted under WTO rules.  The GATT 1994 Articles which specifically refer to the use of such export tariffs are as follows: 
 Article I, which explicitly provides that the MFN principle is applicable to export 
duties (" Article I:  General Most-Favoured-Nation Treatment.  1.  With respect to 
customs duties and charges of any kind imposed on or in connection with  
importation or exportation , or imposed on the international transfer of payments for 
imports or exports, and with respect to  the method of levying such duties and 
charges, and with respect to all rules and formalities in connection with importation 
and exportation, and with respect to all matt ers referred to in paragraphs 2 and 4 of 
Article III*, any advantage, fav our, privilege or immunity granted by any contracting 
party to any product originating in or destined for any other country shall be 
accorded immediately and unconditionally to the like product originating in or 
destined for the territories of all other contracting parties "). 
 
 Article VII, which sets out the general principles governing customs valuation 
("Article VII:  Valuation for Customs Purposes.  1.  The contracting parties 
recognize the validity of the general prin ciples of valuation set forth in the 
following paragraphs of this Article, and they undertake to give effect to such 
principles, in respect of all products subject to duties  or other charges* or 
restrictions on importation and exportation  based upon or regulated in any manner 
by value.  Moreover, they shall, upon a request by another contracting party review 
the operation of any of their laws or re gulations relating to value for customs 
purposes in the light of these principles.  The CONTRACTING PARTIES may request 
from contracting parties reports on step s taken by them in pursuance of the 
provisions of this Article "). 
 
 Article VIII on "Fees and Formalities connect ed with Importation and Exportation", 
which specifically excludes export duties fro m these obligations by stating that:  
"1.(a) All fees and charges of whatever character (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 exportation shall be limited in amount 
to the approximate cost of services re ndered and shall not represent an indirect 
protection to domestic products or a taxa tion of imports or exports for fiscal 
purposes ". 
 
 Paragraph 1 of Article X ("Publication and Administration of Trade Regulations") of 
the GATT 1994, which states that:  " Laws, regulations, judicial decisions and 
administrative rulings of general applicati on, made effective by any contracting 
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 or on the transfer of payments therefor, or 
affecting their sale, distribution, transpor tation, insurance, warehousing inspection, 
exhibition, processing, mixing or other use, shall be published promptly in such a 
manner as to enable governments and trad ers to become acquainted with them ". 
 WT/DS394/R/Add.1 
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  Article XI, which excludes in principle e xport duties from the obligation referred to 
in its title " General Elimination of Quantitative Restrictions" by stating:  "No 
prohibitions or restrictions other than duties , taxes or other charges, whether made 
effective through quotas, im port or export licences or other measures, shall be 
instituted or maintained by any contrac ting party on the impor tation 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 ".  An 
a contrario  reading of the rule in question supports the inference that export customs 
duties are legitimized by the text of the multilateral legal rules. 
 
6. The unequivocal legality and legitimacy of expo rt duties in the GATT/WTO acquis is clear 
from the above transcription of GATT Articles;  su ch duties would otherwise not be repeatedly 
referred to in the GATT rules.  Attention should be dr awn in this regard to the fact that no Panel has 
ever felt the need to clarify this issue. 
C. E
XPORT DUTIES ARE NOT REQUIRED TO BE BOUND  
7. Unlike for import duties, there is no obligation under WTO rules to bind the maximum level 
of export tariffs in schedules of concessions.  Nor ar e there any restrictions with regard to their 
method of application, as exist in Article 4.2 of the Agreement on Agriculture for duties on imports of 
agricultural products. 
8. In view of the above, export duties are not bound in schedules of concessions as there is no 
provision in the GATT 1994 for such binding, nor are there any restrictions concerning the way in 
which these duties are to be applied. 
9. It should be noted that certain Members which have acceded to the WTO in recent years have 
been required to undertake, under what are known as "WTO-plus" considerations, obligations in 
relation to export duties which would be at variance w ith the above with regard to the legality of this 
trade policy instrument in the light of the WTO ru les applicable to pre-existing Members.  This 
tendency to require that candidates for accession unde rtake obligations additional to those contained 
in the General Agreement and/or in the covered Agr eements distorts the very nature of the Agreement 
by denying new Members rights enjoyed by the original Members.  To avoid misleading interpretations, the Protocol on the Accession of Ukra ine had to clarify that the commitment by this 
country to reduce its export duties did not constitute  a reinterpretation of the GATT 1994, nor affect 
"the rights and obligations of other Members in re spect of provisions on the application of export 
duties, that are measures in accordance with GATT 1994 ". 
III. CONCLUSION 
10. In view of the foregoing, Argentina considers that, given that export duties are legitimate 
trade policy instruments under WTO rules, any attempt to reinterpret the use or application of such 
duties which undermines or restricts these rules would be not only detrim ental to developing 
countries, but also GATT-inconsiste nt and incompatible with the objectives of the multilateral trading 
system. 
  WT/DS394/R/Add.1 
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 Page E-5 
  
  ANNEX E-2 
EXECUTIVE SUMMARY OF THE ORAL STATEMENT  
OF BRAZIL AT THE FIRST SUBSTANTIVE MEETING 
 
 
1. Brazil considers that the issues under the Panel's an alysis are of significant systemic relevance 
to the interpretation of key provisions of the GA TT 1994 and therefore wishes to contribute with the 
Panel in its task of objectively assessing the claims brought before it. 
2. The first issue Brazil wishes to address in its or al statement regards the interpretation of the 
requirements of Article XI:2(a) of the GATT 1994, in voked by China in its first written submission as 
a justification for the imposition of exports quotas on refractory-grade bauxite
1. Article XI:2(a) 
contains four requirements that must be met in or der for a measure that prohibits or restricts the 
exportation of "other products" to fall under its di scipline: a) the measure must be temporarily 
applied; b) the measure's objective must be to pr event or relieve a shortage of products in the 
exporting Member; c) this shortage (or the threat th ereof) must be critical and d) the product must be 
essential to the exporting Member. 
3. Regarding the first of these requirements, the de finition of the term "temporarily applied" is 
essential to assess the conformity of measures justified under Article XI:2(a). China argues that a 
measure applied pursuant to this pr ovision could be in force for very long periods of time, without any 
foreseeable date of expiry. This interpretation of the term "temporarily", however, does not seem to be 
accurate, specially when analyzed in the context of  the other requirements of Article XI:2(a). The 
textual meaning of the adjective "temporary", from wh ich the adverb temporarily is derived, seems to 
imply that a temporary measure must either have a time-limit for its application or address a passing need, whose termination is foreseeable  in some point in the future.  
4. Even though a measure applied under Article XI :2(a) may not have a pre-established date of 
expiry, because it may address critical shortages whose moment of termination is uncertain, in order 
for a measure to "last or be meant to last for a limited time only", it must either have an expiry date (in which case it would clearly "last for a limited time only") or have as its purpose the prevention or the relief of a need whose existence is limited in tim e (in which case it would be "meant to last for a 
limited time only"). In this last case, the very d esign and structure of the measure would indicate that 
its imposition addresses a need that will, in  the foreseeable future, cease to exist.  
5. On the other hand, if a measure allegedly ta ken under Article XI:2(a) addresses a permanent 
need, i.e., a need that would not cease to exist in th e foreseeable future, its design and structure would 
indicate that it is not "meant to last for a limited time only", since the need (in this case, a "critical 
shortage") cannot be "prevented" or "relieved". Ther efore, a shortage of exha ustible natural resources 
whose reserves are already known to last for a li mited period of time ca nnot be dealt with by 
measures "temporarily applied". These measures woul d apply indefinitely, for the shortage of 
products could not be overcome in the foreseeab le future, but only managed over time.    
6. Article XI:2(a) cannot be read as a repetiti on of Article XX(g). While Article XX(g) 
disciplines long-term conservational policies, Article XI:2(a) seems to relate to temporary crises of 
supply. In view of this interpretation of Article XI:2(a), the Panel should ascertain if the Chinese 
export quota applied on refractory-grade bauxite is inte nded to deal with a temporary supply crisis, or 
                                                      
1 See China's first written submission, Section C. WT/DS394/R/Add.1 
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Page E-6 
  
  if its structure and design indicate that the m easure falls into the category  of a long-term 
conservational policy, better fit for justifi cation under Article XX(g) of the GATT 1994. 
7. The second issue Brazil wishes to address in its oral statement pertains to the proper 
interpretation of Article XX(g), evoked by China in its first written submission to justify the exports 
duties applied to fluorspar
2 and the export quota applied to refractory-grade bauxite3. The Appellate 
Body Report in US – Shrimp  established a three-tier test to veri fy if a measure can be provisionally 
justified under Article XX(g) of the GATT 1994. Firs t, it must be assessed whether the measure is 
concerned with "exhaustible natural resources". S econd, the measure must be "related to" the 
conservation of the relevant exhaus tible natural resources, implying that the existence of a "genuine 
relationship of ends and means"4 between the measure and its objectives is required. Third, it must be 
established whether the measure is "made effective in conjunction with restrictions on domestic 
production or consumption". In Brazil's view, the last  two requirements of this three-tier test are of 
particular relevance to the present dispute and,  therefore, deserve further consideration.  
8. Regarding the second aspect of this test, due notice should be given to the fact that both the 
domestic and the international restrictions must be "related to" the conservati on of exhaustible natural 
resources . In order to be considered as being conjoi ntly made effective, the domestic and the 
international restrictions should also have a conservational objective. In the US – Gasoline  dispute, 
the Appellate Body also concluded that the seco nd part of paragraph (g) of Article XX of the 
GATT 1994 "is a requirement of evenhandedness  in the imposition of restrictions, in the name of 
conservation, upon the production or cons umption of exhaustible natural resources5". The Appellate 
Body did not elaborate further on the concept of  evenhandedness , but it did affirm that there was "no 
textual basis for requiring identical treatme nt of domestic and imported products.6" This requirement 
might be satisfied with the joint imposition of domest ic and international restrictions on production or 
consumption and trade, aimed at the conser vation of exhaustible natural resources, provided that  both 
the domestic and the international measures were actually related to the conservation of exhaustible 
natural resources.  
9. The last requirement of Article XX(g) seems to  allow for a country to exploit its resources 
pursuant to its own environmental and developmen tal policies. Nothing in the WTO Agreements 
seems to impose the shared use of the world's natural resources as an obligation to Members. 
Therefore, the right of Members to consider th eir own developmental needs in the use of their 
resources is endorsed by WTO law, in a manner consistent with the principle of Permanent 
Sovereignty over Natural Resources,  but without prejudice to the obligation of a Member claiming 
justification of a measure under Article XX(g) to demonstrate its full compliance with the 
requirements contained therein, including its chap eau. These requirements ensure that conservational 
measures adopted pursuant to Article XX(g) relate to  a legitimate conservational policy objective; that 
they do not target exclusively foreign suppliers or consumers; and that they do not constitute a 
protectionist restriction. 
                                                      
2 See China's first written submission, Section B. 
3 See China's first written submission, Section D. 
4 US – Shrimp  (Appellate Body Report, para. 136) 
5 US – Gasoline  (Appellate Body Report, page 21) 
6 US – Gasoline  (Appellate Body Report, page 21)  WT/DS394/R/Add.1 
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 Page E-7 
  
  ANNEX E-3 
 
EXECUTIVE SUMMARY OF WRITTEN SUBMISSION AND  
ORAL STATEMENT OF CANADA 
  
I. INTRODUCTION 
1. Canada is concerned about the issues invol ved in this case both as an exporter of raw 
materials whose companies are engaged in raw ma terial extraction throughout the world, and as a 
producer of products – notably steel and aluminium – that use the raw materials at issue as inputs. 
II. EXPORT DUTIES 
2. Members are free under the  General Agreement on Tariffs and Trade  ("GATT ") to impose 
export duties unless they negotiate away that right in some other Agreement. If a WTO Member does 
commit in another Agreement not to impose export duties, then any exceptions to that commitment 
are governed by that other Agreement. 
3. China committed itself in paragraph 11.3 of its  Accession Protocol to eliminate export duties 
on all products except those listed in Annex 6 and ev en for those listed products to limit the amount of 
export duties to specified amounts. China's commitment under paragraph 11.3 is not subject to the exceptions in the GATT  (or elsewhere in the WTO Agreement ) because there is no language explicitly 
incorporating Article XX of the GATT  or language similar to the intr oductory phrase of paragraph 5.1 
of the Accession Protocol. 
III. NON-FINANCIAL RESTRICTIONS ON EXPORT (QUOTAS, LICENCES AND 
MINIMUM PRICES)  
4. Exports can be limited quantitatively through quot as or by limiting those who are permitted to 
export through (non-automatic) licensing. China's export quotas on bauxite, coke, fluorspar, silicon 
carbide and zinc are contrary to Article X:1 of the GATT . So is China's related discretionary, non-
automatic licensing system, which operates to creat e additional restrictions independent of the 
prohibited quotas. 
5. Article XI:1 applies to "other measures" that  restrict exports. The phrase "other measures" 
covers minimum export prices because restrictions  on exports below certain prices impose economic 
hardship caused by decreased supp lies and increases in prices. Thus, minimum export prices violate 
Article XI:1 of the GATT . 
6. China does not satisfy the requirements to defe nd its measures under Article XI:2(a) of the 
GATT , which permits export restrictions "temporarily applied" to prevent critical shortages. The 
requirement of temporary application cannot be me t through permanent measures that are regularly 
reviewed. Measures reviewed regularly but imposed  indefinitely, as Canada understands the Chinese 
measures at issues are, are not applied for a fixed time. Further, limited state practice does not meet the requirements of the Vienna Convention on the Law of Treaties  and is irrelevant for an 
interpretation of GATT  Article XI:2(a). 
7.
 Article XX(b) allows a defence to a breach of  a provision of the GATT where the measure is 
"necessary to protect human, animal or plant life or health." The export restrictions do not protect 
human, animal or plant life or health. The eviden ce is that China imposes the export restrictions WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-8 
  
  because it wants to ensure that its producers that  use those raw materials as inputs are advantaged. 
There are alternative measures that could be adopt ed to more effectively address life and health 
concerns – from stricter health, safety and environm ental legislation, to putting more resources into 
enforcing existing legislation, to providing greater infrastructure and institutional support to deal with 
environmental and health concerns created by extractive industries. 
8. Article XX(g) allows a defence to a breach of a provision of the GATT  where the measures 
are "relating to the conservation of exhaustible na tural resources if such measures are made effective 
in conjunction with restrictions on domestic produc tion or consumption." China has not demonstrated 
even-handedness in the application of  its measures. The export restrictions limit the amount of the raw 
materials in question that foreign users may access, but reveal no similar restriction on domestic users – to the contrary, the effect of export restri ctions is to increase domestic consumption. 
9. China's evidence of some limitations on domest ic production does not serve to demonstrate 
even-handedness. The production limitations have been imposed after the export restrictions were put 
in place. Further, a limitation on production affects both foreign and domestic users and is therefore 
no evidence of a measure affecting only domestic user s that could balance the effect of the export 
restriction that affects only foreign users. 
10. China has not met the requirements of the chapeau  of Article XX, notably because the export 
restrictions discriminate between domestic and fore ign users of the raw materials in question. Also, 
the facts show that the effect of the export restric tions is to favour domestic users of the raw materials 
in question and this is a "disguised r estriction" within the meaning of the chapeau . 
IV. OTHER CHARGES IMPOSED ON OR IN CONNECTION WITH EXPORTATION 
11. There are no "holes" that permit a WTO Member to impose charges without constraint except 
for charges explicitly permitted by the GATT  (notably export duties). Amounts paid (through a 
bidding process or otherwise) to obtain the right to export products are either export duties or charges 
imposed "on or in connection with" exportation covered by GATT  Article VIII:1(a). China has agreed 
to limitations on its ability to impose export duties in its Accession Protocol. As a result, whether a 
bid-winning price is an export duty or falls under GATT  Article VIII:1(a), it is not consistent with 
China's WTO obligations. 
V. TRANSPARENCY 
12. Transparency, predictability and consistency in  the application of trade regulations and 
procedures are essential to the operation of the world trading system. Without open and predictable 
procedures, traders cannot operate effectively and competitively. Changing or uncertain requirements 
also make effective business operations impossible. Violations of Article X of the GATT  should not 
be treated as subsidiary considerations to other substantive provisions of the GATT .  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-9 
  
  ANNEX E-4 
 
THIRD PARTY SUBMISSION OF CHILE
* 
 
 1. Mr Chairman, distinguished members of the Panel,  the delegation of Chile, as a third party to 
this dispute, welcomes the opportunity to presen t its views on some of the elements involved. 
2. This dispute calls for the assessment of systemic matters of the utmost importance. The 
interpretation that is made with respect to the u se of export restrictions should tend towards the 
reaffirmation of principles and obligations that  are essential to the multilateral trading system. 
3. Chile has noted with concern the increased use of this type of instrument.  We agree with the 
analysis made by both the WTO and the OECD as re gards the distorting effects of such measures on 
international trade.  We attach particular importa nce to the analyses indicating that when differential 
export duties are applied to goods belonging to the same production chain, this generates subsidies on 
the final product exported, thereby distorting the comp etitive terms of international trade.  Chile has 
suffered and continues to suffer from the effects of measures of this kind. 
4. Although it would appear that there are no mu ltilateral disciplines regulating export duties, 
this by no means implies that su ch measures are being applied with the unrestricted consent of the 
interested party, as though endowed with legitimacy  in all circumstances and hence free from the 
scrutiny of the multilateral system. 
5. The express limitations to the application of export duties contained in China's Accession 
Protocol constitutes evidence, in our view, that Members intended that such application should be 
subject to certain restrictions and limitations.  Th ere is an implicit recognition that export duties must 
be subjected to certain rules in order to preserve the rights of WTO Members. 
6. As regards export restrictions disciplined by Article XI of the GATT 1994, which also form 
part of the subject matter of this dispute, we think th at a correct interpretation is in order. In particular, 
it is essential that we reaffirm the general pro scription against instituting or maintaining export 
prohibitions and restrictions and are clear on the coverage of the exception contained in 
Article XI:2(a). 
7. Considering that much of China's defence is based on the exceptions contained in 
Article XX(b) and (g) of the GATT 1994, my delegati on thinks that the Panel should be very cautious 
in examining the appropriateness of the requirement s and standards contained in those subparagraphs 
as well as in the chapeau of that Article.  It is up to China to provide evidence that the adoption of the 
challenged measures was justified by the correspondi ng provisions.  If we look at the defence based 
on subparagraph (g), for example, evidence of the application of restrictions on domestic production 
or consumption in conjunction with restricti ons on exports must flow unequivocally from the 
background information provided by the party invoking that exception. 
8. Finally, regarding China's claim that some of the challenged measures are outside the terms of 
reference of the Panel because they have been rep ealed, my delegation would like to recall that the 
Appellate Body, in the second recourse by Ecuado r to Article 21.5 of the DSU in the dispute 
European Communities - Bananas III , pointed out that "once a Panel has been established and the 
terms of reference for the Panel have been set, th e Panel has the competence to make findings with 
                                                      
* Original Spanish. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-10 
  
  respect to the measures covered by its terms of refere nce."  In this case, owing to the nature of the 
complaints, and in order to ensure security and pr edictability, we think that findings should be made 
with respect to these repealed measures. 
 Once again, thank you very much for providing us with this opportunity. 
 
  WT/DS394/R/Add.1 
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 Page E-11 
  
  ANNEX E-5 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY SUBMISSION  
OF COLOMBIA 
  
I. INTRODUCTION 
1. Colombia is intervening in this case because of its systemic interest in the proper 
interpretation of several provisions: ( i) the scope and coverage of China's commitments before the 
WTO; ( ii) the legal standard of review and interpretation of Article XI:1; and  (iii) the interpretation of 
the exceptions under Article XI: 2(a) and Article XX (g) of the GATT 1994. 
II. CHINA'S COMMITMENTS BEFORE THE WTO 
2. The complainants claim that  export duties and  export quotas are inconsistent with China's 
obligations under  the Protocol on the Accession of the People's Republic of China  ("the Accession 
Protocol") and  the Report of the Working Party  ("the Working Party Report"). 
3. In interpreting the legal status of the Accessi on Protocol and the Working Party Report, the 
Panel in China – Auto Parts
1 stated: "[t]he Accession Protocol is an integral part of the WTO 
Agreement (…). In turn, paragraph 342 of Ch ina's Working Party Repor t incorporates China's 
commitments under its Working Party Report, (…) in to the Accession Protocol". These measures are 
enforceable under the dispute settlement procedure of the WTO.    
4. First, regarding the export duties measures, the Parties agree that Chin a applies such measures 
on various raw materials. The complainants have pre sented their claims in respect of the export duties 
under the Accession Protocol and the Working Party Report. In response, China claims that such 
measures are justified under Articles XX (b) and (g) of the GATT 1994. 
5. Based on WTO jurisprudence relative to the Panel's order of analysis2, Colombia considers 
that the Panel should begin its analysis with the complainant's claims under Paragraph 11.3 of the 
Accession Protocol with respect to export duties.  
6. Pursuant to Paragraph 11.3 of the Accession Pr otocol, Colombia considers that China may 
apply export duties, if the following criteria are met: ( i) that the product is listed in Annex 6; ( ii) that 
the applied export duty does not exceed the tariff level established in Annex 6; and ( iii) if the applied 
export duty exceeds the tariff level established in  Annex 6, such an increase must be due to 
exceptional circumstances. If after the foregoing anal ysis, it is concluded that the export duties are 
inconsistent with WTO law, the Panel should consider China's defe nse pursuant to Articles XX (b) 
and (g) of the GATT 1994. 
7. Second, concerning the export quota measures, while the complainants argue that export 
quotas applied by China are inconsistent with Chin a's obligations provided in Paragraphs 162 and 165 
of the Working Party Report, China requests to exer cise judicial economy. According to the order of 
analysis mentioned  supra,  the Panel should begin its assessme nt with China's obligations under 
Paragraphs 162 y 165 of the Working Party Report.   
                                                      
1 Panel Report, China – Auto Parts , para. 7.740. 
2 Panel Report, India – Quantitative Restrictions , para. 5.124. WT/DS394/R/Add.1 
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Page E-12 
  
  8. From the joint reading of Paragraphs 162 y 165 of the Working Party Report, it appears that 
China committed to the following: ( i) to only use restrictions when justified under the GATT 1994; 
and ( ii) to eliminate all trade restrictions at the mome nt of its accession to the WTO, unless that such 
restrictions could be justified on the basis of the WTO Agreement or the Accession Protocol. If it is 
determined that the application of export quotas does not comply with the parameters mentioned 
supra, the Panel may conclude that this measure is cont rary to China's WTO obligations. If that is the 
case, the Panel should examine China's defense unde r Articles XI:2(a) and XX(b) and (g) of the 
GATT 1994.  
III. STANDARD OF APPLICATION OF ARTICLE XI: 1 OF GATT 1994 
9. According to GATT and WTO jurisprudence, Colomb ia submits that in order to determine if 
a particular measure is a restriction  on imports, exports or sale for export of any product destined for 
the territory of any other Member, it is necessary to  conclude that such measure limits the possibilities 
that a merchant has in order to undertake its tr ading enterprises. Thus, the measure would be a 
restriction if it: creates uncertainties or adversely affects the investment plans of the merchant; creates 
prohibitive costs for the merchant to engage in  its trading activities; or has an effect on the 
competitive position of the merchant as to limit its possibilities to import or export any good. It is 
important to clarify that this assessment should be undertaken in light of the facts of the case and not 
in an abstract manner, since it is only from the an alysis of the measure at issue that it could be 
concluded whether such measure could be deemed a restriction . 
10. Following the considerations above, Colombia respectfully requests the Panel to take the 
opportunity to systematize the criteria for the assessment of whether a measure is a restriction  under 
Article XI:1 of the GATT 1994, and that for such a task it takes into account certain aspects outlined 
in this submission.  
IV. EXPORT LICENCES  
11. The complainants allege that the Chinese export licensing system (ELS) is  inconsistent with 
Article XI: 1 of the GATT. Colombia believes th at the Panel should examine whether the measure 
adopted by China, allegedly "discretional and non automatic" according to the  complainants, or 
"automatic" according to China, represents a restric tion under the scope of Article X I: 1. In this 
context, it is relevant to assess the ELS based  on the design of the measure at issue.  
12. When analyzing if the ELS imposed by China is automatic, non automatic or discretionary, 
the Panel shall establish up to which point the pr oceedings for licensing are clear and unambiguous in 
its terms, despite the allegation advanced by th e complainants that the measures have non defined 
terms, uncertain legal wording, and is discretiona ry on its face. In Colombia's opinion, the Panel 
should assess whether these terms defined by the Chinese regulation, offer an extremely broad 
interpretation that does not grant predictability fo r exporters regarding the future action of the 
system's manager.  
13. On the other hand, if the Panel finds that this  system is not automatic, it is relevant for 
Colombia that the Panel clarifies whether the fact of it been non au tomatic renders this system an 
export restriction. Colombia deems relevant for the Panel to clarify the implications of a non-
automatic and discretionary system in light of the Members' obligations.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
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 Page E-13 
  
  V. EXCEPTIONS CLAIMED BY CHINA 
14. Pursuant to Article XI:2 (a) and Article XX (g) of the GATT 1994, China holds that the 
export duties and export quotas measures ar e consistent with its WTO obligations. 
15. In first place, China argues that the export quotas are justified under Article XI:2 (a) of the 
GATT 1994. This provision establishes that the complia nce with the rules of Article XI:1 can be 
temporarily exempted  inter alia in order to prevent or relieve critical shortages of either:  
(i) foodstuffs; or  (ii) other products essential  to the exporting Member. As China points out, as of 
today there has not been any report, under the GATT or the WTO, dealing with the scope and 
definition of the term  other products essential  to the exporting Member.  
16. As with respect to Article XI: 1 of the GA TT 1994, Colombia respectfully request the Panel 
to include in its report an interpretive standard that sheds light upon the scope of application and 
requirements for a measure to fall unde r Article XI: 2 (a) of the GATT 1994. 
17. With respect to Article XX (g) of the GATT 1994, according to WTO jurisprudence
3, the 
Panel should: (i) determine if the nine (9) ra w materials can be included under the category of 
"exhaustible natural resources"; (ii)  examine the relation that exists between the general structure and 
design of the measures at issue, and the policy goals sought by China, i.e. the conservation of those 
resources; and (iii)  identify if the export restrictions are made effective in conjunction with 
restrictions on domestic production or consumption. 
18. If the Panel finds that the restrictions to th e exportations imposed by China fall within the 
purview of Article XX (g) of the GATT 1994, it should  conduct an analysis of those restrictions under 
the chapeau of Article XX of the GATT 1994. In  that sense, as established by the Appellate Body4, 
the Panel should examine: (i)  if the restrictions to the exportation imposed by China constitute an 
"arbitrary" measure; (ii)  if the restrictions to the exportati on imposed by China are a justifiable 
measure; and (iii)  if the restrictions to the exportation impose by China constitute a disguised 
restriction to international trade. 
 
                                                      
3 Appellate Body Report, US – Shrimp , paras. 125-145. 
4 Appellate Body Report, US – Shrimp , para. 150. WT/DS394/R/Add.1 
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Page E-14 
  
  ANNEX E-6 
 
ORAL STATEMENT OF ECUADOR AT THE  
FIRST SUBSTANTIVE MEETING 
 
1. Ecuador wishes to thank the Panel for giving us the opportunity to present our views and 
opinions in this third party session. We have both sy stemic and legal concerns over the result of this 
Panel.  
2. We would like to touch upon briefly over two i ssues: (1) The interpretation of article XI of 
GATT 1994 and (2) The general exception contained in  paragraph (g) of article XX of GATT 1994. 
I. THE INTERPRETATION OF ARTICLE XI OF GATT 1994.- 
3. For Ecuador is crystal clear that article XI of GATT 1994 does not forbid the application of 
any form of export taxes, duties or other charges, and there is no commitment or agreement that force 
to bind them. As it was pointed out by Argentina in  its first third party submission, export taxes are 
important instruments of developm ental policy for an important group of developing countries. In the 
last "World Trade Report 2010: Trade in Natura l Resources", Box 19, pages 127 and 128, the WTO 
has a very illustrative title for that Box that I quote: "Export taxes as tool to address resource 
volatility, dominance and tariff escalation problems" end of the quote.  
4. It is not our intention to begi n a debate on economic policy in a mainly legal procedure as this 
one, but we would only recall anot her conclusion of the Report over this issue and I quote: "Three 
motives justify the use of an export tax in these circ umstances. First, it softens the impact of rapidly 
rising world prices in the domestic market (recall that the impact of an export tax is to lower domestic 
prices) thus protecting local consumers. Second,  it increases government revenue, thus easing fiscal 
imbalances. Third, it taxes windfall gains of exporter s, thus promoting a fairer distribution of income" 
end of the quote.  
5. These brief reflections extracted from the Report on which we totally agree, demonstrates 
how important export taxes are for some developi ng countries policies, either as tools to promote 
infant industries, to manage instability of commodity  prices or to reduce the impact of tariff escalation 
applied by develop countries in detriment of de veloping countries that heavily depend on unprocessed 
primary commodities, among others. We are sure that the drafters  of article XI.1 took into 
consideration these factors and therefore kindly requ est that the Panel reaffirms this conclusion.  
II. THE GENERAL EXCEPTION CONTAINED IN PARAGRAPH (G) OF ARTICLE XX 
OF GATT 1994. 
6. Literal (g) of article XX of the GATT 1994 refers  to the conservation of exhaustible natural 
resources. This is a major issue and concern for developing countries like my own and as explained 
broadly in the third party submission by the Kingdo m of Saudi Arabia, that Ecuador fully supports, 
this exception involves the right of countries to ma nage their natural resources according to their 
sovereign present and future deve lopmental requirements, recognized in several International 
Conventions and Declarations we ll covered by the Kingdom of Saudi Arabia submission. Ecuador 
would also like to recall that the Law of the Sea recognises those rights. 
7. Regarding the chapeau of article XX, the Pane l should find the right balance in interpreting 
the exception of literal (g) through past precedents of the Appellate Body and the needs of Members  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
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  to resort to alternatives that will not endangered th eir developmental aims, particularly of developing 
countries.      
8. Finally, Ecuador would like to recall that yet once again this dispute involves commitments 
that certain Members that joined the WTO after th e establishment of this organization were force to 
undertake, as is the case of China and Ecuador. What keeps on surprising us is that those 
commitments written in our Accession Protocols go beyo nd the obligations that we have to respect in 
multilateral and even in plurilateral agreements of the WTO, commitments that the Members who 
participated in the Uruguay Round have no obligation to comply with.  
9. This situation has created an unequal set of obligations for two groups of Members of the 
WTO. One group that has to comply with their A ccession Protocols commitments and the agreements 
of the WTO and the second one, that has a clear set of obligations only written in the agreements of 
the WTO and nothing beyond that, while at the same time enjoy a blank check to complain over commitments that they were not oblige to undertake.  It's a very unfair situation to describe it in a 
simple way.  
10. We thank again the Members of the Panel for giving us the opportunity to deliver this 
statement and respectfully request to take into cons ideration Ecuador's opinions over this dispute.   
 WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-16 
  
  ANNEX E-7 
 
ORAL STATEMENT OF INDIA AT THE FIRST SUBSTANTIVE MEETING 
 
 
I. INTRODUCTION  
1. Mr Chairman and distinguished members of the panel. At the outset India would like to thank 
the panel for giving this opportunity to present its views relating to this dispute in the third party 
session.  The issues brought out in the dispute by th e complainants are very significant and raise the 
issues of restrictions on the exports of raw material s.  The issues have systemic importance in as much 
as these raise the questions of availability of raw materials by industries world over in a fair and 
GATT/WTO compliant manner. India attaches importance to these issues as we are ourselves producers and exporters of basic minerals as well as  we have a large and diverse industry base where 
these important raw materials are used.  Therefore, we  have significant interest in ensuring a fair play 
in the global trade of raw materials which must  be in accordance with the rules framed under 
GATT/WTO. 
2. China applies export restrictions on the raw ma terials in the form of (a) export quotas (b) 
export duties, (c) export licences and (d) mini mum export price requirements through various 
legislations cited by the complainants. The nine indu strial raw materials which have been subjected to 
the various export restraints imposed by China ar e– bauxite, coke, fluorspar, magnesium, manganese, 
silicon carbide, silicon metal, ye llow phosphorus and zinc. These are important raw materials or 
minerals of critical importance to the downstream industries. These restrictions, when imposed in a 
manner which is either not consistent with the Artic le VIII, Article X, Article XI and Article XX of 
GATT or as per China's commitments under the Pr otocol of Accession, distort competition by  
increasing global prices and thereby putting to disadvant age the users of such industrial raw materials. 
Downstream industries in China therefore have a ccess to cheaper materials than their competitors 
outside China.  
A. E
XPORT DUTIES  
3. China subjects certain raw materials with export duty rates, such as "temporary" export duty 
rates and/or "special" export duty rates of vari ous magnitude.  More specifically China maintains 
export duty on bauxite, coke, fluorspar, magnesium, manganese, silicon metal and zinc.  As per the 
commitments under Section 11.3, Part I of the Access ion Protocol, China is required to eliminate all 
taxes and charges applied to ex ports unless specifically provided for in Annex 6 of the Accession 
Protocol or applied in conformity with the pr ovisions of Article VIII of the GATT, 1994. These 
products do not figure in Annex 6 of the Protoc ol of Accession. Export duties imposed by China on 
these raw materials cannot be covered under Ar ticle VIII of the GATT, 1994 as the financial 
obligations that China puts on exports are not the ki nd of fees and charges covered by the said Article. 
4. China argues that its export duty with respect to  fluorspar is justified under Article XX (g) of 
the GATT, 1994 and with respect to coke, mangane se, magnesium and zinc under Article XX (b) of 
the GATT, 1994. The general exceptions men tioned under Article XX can be invoked only upon 
fulfillment of conditions laid down in the chapeau of this Article. The chap eau specifies that such 
measures are not to be applied in a manner which w ould, inter-alia, constitute a disguised restrictions 
on international trade. China has to demonstrate havi ng met this standard in case it claims to maintain 
the export restrictions under these general exceptions.    WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-17 
  
  B. E
XPORT QUOTA  
5. China restricts the exportation of various forms of bauxite, coke, fluorspar, silicon carbide 
and zinc by subjecting the exportation of these mate rials to export quotas or prohibition. This 
constitutes a violation of Article XI of GATT, 1994 which provides that no prohibition or restrictions 
other than duties, taxes or othe r charges, whether made effectiv e through quotas, import or export 
licences or other measures shall be instituted or  maintained on importati on or exportation of any 
product. China justifies its measure in light of Artic le XI 2(a) and Article XX (g) of the GATT, 1994 
in respect of refractory grade bauxite. Article XI 2(a), according to China, excludes the operation of 
Article XI (1) where export prohibitions or restricti ons are temporarily applied to prevent or relieve 
critical shortage of foodstuffs or other products essen tial to the exporting party. Article XX (g) of the 
GATT, 1994 permits restrictions or prohibition for conservation of exhaustible natural resources if 
such measures are made effectiv e in conjunction with restric tions on domestic production or 
consumption. China has not justified the temporary na ture of the measure as well as its application for 
a limited period. 
6. China justifies quota restrictions under Article XX (b) of GATT, 1994 on general exception in 
respect of rest of the products in question. Th is Article allows exception from  the provisions of 
GATT, where the measure is necessary to protect human,  animal or plant life or health.  The measures 
of China do not appear to address the objective of pr otecting human, animal or plant life or health.   
C. ADMINISTRATION OF QUOTA AND LICENCES  
7. China imposes and administers its measures in a manner that is not uniform, impartial, and 
reasonable.  Further, it imposes excessive fees and formalities on exportati on, and does not publish 
certain measures pertaining to requirements, re strictions, or prohibitions on exports. China 
administers the export quotas imposed on bauxite, coke, fluorspar, silicon car bide, and zinc, through 
its ministries and other organizations under the State Council as well as chambers of commerce and 
industry associations, in a manner that restricts expor ts and is not uniform, impartial and reasonable. 
In connection with the administration of the quotas for these materials, China imposes restrictions on 
the right of Chinese enterprises as well as foreign enterprises and indi viduals to export. Therefore, 
these measures are not consistent with Chin a's obligation under Article X.3 of GATT. 
8. 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 licensing for bauxite, coke, fluorsp ar, silicon carbide, and zinc in connection with 
the administration of the export quotas, as an additional restraint on the exportation of those materials.  
9. India, therefore, considers that these measures are inconsistent with Article VIII: 1(a) and 
VIII: 4, X.1 and X.3(a) of GATT, 1994. 
II. CONCLUSION 
10. India takes this opportunity to request the pane l to recommend that China brings its measures 
in conformity with the provisions of GATT 1994 and its Accession Protocol in accordance with 
Article 19.1 of the DSU.  
 
 WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-18 
  
  ANNEX E-8 
 
EXECUTIVE SUMMARY OF WRITTEN SUBMISSION AND  
ORAL STATEMENT OF JAPAN 
  
1. Introduction of the written submission : In the written submission, Japan presents its views 
on (1) whether Article XX of the GATT can be invoke d with respect to violations of paragraph 11.3 
of Part I of China's Accession Protocol(" Protocol "); (2) whether China has demonstrated that 
Article XX(g) or XX(b)of the GATT would justify any violations of its World Trade Organization 
("WTO") obligations; and (3) whether the "total  award price" requirement is contrary to 
Article VIII:1(a) of GATT and/or paragraph 11.3 of Part I of the Protocol .   
2. The applicability of Article XX of the GATT to violations of paragraph 11.3 of Part I of 
Protocol : Japan considers that Article XX, stati ng that "nothing in this Agreement  shall be construed 
to prevent the adoption or enforcement", applies to measures which contravene provisions of the 
GATT. However, as recognized by the Appellate Body, the introductory phrase under paragraph 5.1 
of Part I of the Protocol  authorized recourse to Article XX.
1  Paragraph 11.3 of Part I of the Protocol  
does not contain such language and the working party report does not indicate that export duties may be authorized by recourse to Article XX.
2  Japan strongly doubts that China may rely on Article XX to 
justify violations of commitments contai ned in paragraph 11.3 of Part I of the Protocol .   
3. If the Panel, however, were to find that Article XX is available as a defense to a violation of 
paragraph 11.3, Japan submits that the Article XX  defense put forward by China may not be found 
justifiable. 
4. Article XX(g) of the GATT:  Article XX(g) requires that the measure must be concerned 
with "the conservation of exhaus tible natural resources", must "relat[e] to" a conservation goal and 
must have been "made effective in conjunctio n with restrictions on domestic production or 
consumption". With respect to "relat[e] to", a measure must exhibit a "substant ial relationship"  to the 
conservationist goal pursued.3  The key element of the "relating to"  test is whether the means are 
"reasonably related to the ends"4  and "close and genuine relationship of means and ends "5 is required. 
Regarding the "in conjunction with", it does require that at least some "even-handed" domestic 
production or consumption restrictions be in place.6  In terms of context, Article XX(g) as a whole  
requires that any trade-restrictive measures be "mad e effective in conjunction with restrictions on 
domestic production or consumption" for the purpor ted objectives.  As such, "even-handed" domestic 
measures may not be such as to effectively un dermine the purported objectives and it must contribute 
to such objectives. 
5. Concerning the chapeau ,  China, as the party invoking GATT Article XX, bears the burden of 
proof in demonstrating that the measures are not applied in a manner which would (i) "constitute a 
                                                      
1 See Appellate Body Report, China – Publications and Audiovisual Products , paras. 223, 228 and 230. 
2 See Report of the Working Party on the Accession of China, WT/ACC/CHN /49 (1 October 2001), 
paras. 155-156. 
3 Appellate Body Report, US – Gasoline , p. 19 (emphasis added). 
4 Appellate Body Report, US – Shrimp , paras. 137, 140-141. 
5 Appellate Body Report, US – Shrimp , para. 136. 
6 Cf. GATT Panel Report, US – Tuna I  where the Panel relied, among other things, on the fact "that the 
United States representative had provided no evidence that domestic consumption of tuna and tuna products had 
been restricted in the United States".  US – Tuna I , para. 4.11.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-19 
  
  means of arbitrary or unjustifiable discrimination " or  (ii) be "a disguised restriction on international 
trade".
7      
6. In Japan's view, export quota on refractory grade ba uxite can be considered as relating to the 
conservation of products subject  to production restrictions if the export quota are set at a level equal to 
domestic production restrictions. Japan is of the view that the Panel has to take a close look at whether 
there are "even-handed" domestic duties or equivalent measures in place.     
7. Article XX(b) of the GATT:  China invokes Article XX(b)8 in relation to a violation of 
Paragraph 11.3 of Part I of the Protocol  relating to export duties9 and a violation of Article XI:1 of the 
GATT in relation to export quota.10 It is not clear from China's subm ission whether China restricts the 
production of these products, but, even if it does, Jap an does not believe that  China has sufficiently 
explained why the export quotas and export duties on these products are "necessary" to protect human 
health.   
8. Sovereignty over natural resources and the WTO:  Japan also notes that China's invocation 
of the UNGA Resolution on permanent sovereignty ove r natural resources is irrelevant because the 
preamble only states that "due regard should be paid to the rights and duties of States under international law".
11 And this resolution is not legally binding. Further, China became a Member of 
the WTO by its own free choice, it should observe  the WTO Agreements in good faith. Lastly, the 
languages "the optimal use of the world's resource s" in the preamble of the Marrakesh Agreement 
establishing the WTO Agreement imply that the WTO Members have agreed to share their natural 
resources efficiently among the Members. 
9. The total award price:  The total award price, in Japan's view, is likely inconsistent with 
paragraph 11.3 of Part I of the Protocol . Although the total award price is a charge applied to exports 
of bauxite, silicon carbide and fluorspar, it is not provided for in Annex 6 of the Protocol .12  It is also 
not applied in conformity with Article VIII of th e GATT, because either (i) Article VIII does not 
apply to the total award price; or (ii) because the total award price is not limited to the approximate 
cost of services rendered to individual exporters . Therefore, the total award price is inconsistent with 
paragraph 11.3 of Part I of the Protocol . 
10. Introduction of the oral statement  : In the oral statement, Jap an addresses six topics: (1) the 
requirement to present the problem clearly; (2) expired measures; (3) Article XI:1 of the GATT; (4) China's GATT Article XI:2 defense; (5) the pr inciple of sovereignty over national resources and 
Article XX(g) of the GATT; and (6) China's GATT  Article XX defenses. Because of the limited 
spaces allowed for executive summary, Japan does not include its discussion on topics (5) and (6) 
which were also discussed in its first written submission. 
                                                      
7 See also  Appellate Body Report, US – Shrimp (Article 21.5- Malaysia) , para. 118; Appellate Body 
Report, US – Shrimp , para. 150; Appellate Body Report, US – Gasoline , pgs. 21-22. 
8 Sub-paragraph (b) provides that, so long as the requirements of the chapeau  are met, WTO Members 
can adopt or maintain measures that  are "necessary to protect human, anim al or plant life or health".   
9 China's first written submission, para. 197. 
10 China's first written submission, para. 528. 
11 See  UN GA Resolution 1803(XVII), Permanent Sovereignty Over Natural Resources 
(14 December 1962), Preamble. 
12 Since the types of bauxite, silicon carbide and fluo rspar subject to the total award price requirement 
are not listed in that Annex. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-20 
  
  11. Requirement to present the problem clearly : China claims that the complainants have 
failed to "plainly connect" the measures and treat y provisions in Section III of their panel requests.
13 
The determination of whether a problem is stated clearly, i.e. there is plain connection, must be made 
with respect to the panel request read "as a whole"14 thus it is evident that Section III "present the 
problem[s] clearly". 
12. Expired measures : China requests that the Panel refrain from making findings and 
recommendations related to some measures becau se they expired before the Panel proceedings 
"commenced".15 Japan notes that the date of establishment of  the panel is generally the relevant point 
in time for determining whether measures may be included within a panel's terms of reference.16  
13. Article X1:1 of the GATT : China argues that the Complainants have failed to state prima 
facie claims under Article XI:1 of the GATT with respect to export quotas.17 In Japan's view, 
therefore, there can be little doubt that the Complain ants need not demonstrat e that Article XI:2 does 
not apply in order to establish a violation of Article XI:1 of the GATT.  Rather, it is China which must 
invoke Article XI:2 as a defense and which also bears the burden of proving that it applies. 
14. China's Article XI:2 defense : Canada has clearly presented five key points to defend a 
measure under Article XI:2(a) in its submission.18  Japan agrees with Canada that the Chinese 
measure does not fulfil the requirement of temporary application.  Further, Japan considers it doubtful 
that the Chinese measure complies with the "critical  shortage" requirement as the term "critical" 
means " [o]f, pertaining to, or constituting a crisis" or "of decisive importance. "19 Japan requests the 
Panel to take full account of this consider ation when reviewing the Chinese defense. 
 
 
 
                                                      
13 See China's first written submission, paras. 16 and 29. 
14 See Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 169. 
15 See China's  first written submission, Part II.E.3. 
16 See, e.g.,  Appellate Body Report, EC – Chicken Classification, para. 156; Appellate Body Report, 
EC – Selected Customs Matters , para. 184. 
17 China's first written submission, para. 351. 
18 Third party submission of Canada, para.14.  While  Japan generally agrees with Canada's assessment 
of the requirements, for the sake of clarity, it would note that a respondent invoking Article XI:2(a) need only 
demonstrate compliance with the Article XI:2(a). The re quirement that the measure at issue be an "export 
restriction or prohibition" is of cour se for complainants to establish. 
19 New Shorter Oxford English Dictionary (1993), p. 551.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-21 
  
  ANNEX E-9 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY SUBMISSION  
OF KOREA 
  
I. INTRODUCTION 
1. This third party submission is presented by the Government of the Republic of Korea 
("Korea") with respect to certain aspects of the first written submissions of the United States, the 
European Union and Mexico (collectively the "C o-Complainants") dated 1 June 2010 and of the 
People's Republic of China ("China") dated 4 August 2010, respectively.  Korea has systemic interests 
in the interpretation and application of various provisions of the GATT 1994, the Accession Protocol 
and the Working Party Report, all of which are exte nsively discussed in this controversial dispute.  
Korea appreciates this opportunity to present its views to the Panel. 
II. LEGAL ARGUMENTS 
A. MERE
 VAGUENESS  OF THE  TERMS  CONTAINED  IN THE  PROVISIONS  OF LAWS  
AND  REGULATIONS  OF A MEMBER  DOES  NOT  NECESSARILY  AMOUNT  TO THE  
MEMBER'S  "AS  SUCH"  VIOLATION 
2. In this factually intensive dispute, the parti es present different accounts and descriptions for 
key factual situations. In Korea's view, as to some, if not all, of the measures raised in this dispute, the 
Co-Complainants seem to have presented factual info rmation and legal arguments to substantiate their 
prima facie claims.     
3. In certain instances, however, the Co-Complai nants appear to have simply identified 
situations where vague terms are used in the laws an d regulations of the Member complained against.  
The Co-Complainants then appear to argue that th ese are sufficient to find "as such" violation on the 
part of the Member. To the extent these legisla tive documents contain "discretionary" language, we 
submit that the Panel's evaluation of the issue should be guided by the "good faith presumption" which is attached to the interpretation of a Member's laws and regulations. In US – Oil Country 
Tubular Goods Sunset Reviews , noting the general "presumption that WTO Members act in good faith 
in the implementation of their WTO commitments," the Appellate Body stated that this presumption 
"is particularly apt in the context of measures challenged 'as such.'"
1  
B. THE  EXPORT  QUOTA  MEASURE  ADOPTED  BY CHINA  SEEMS  TO BE 
INCONSISTENT  WITH  CHINA'S  OBLIGATION  UNDER  THE  GATT  1994,  THE  
ACCESSION  PROTOCOL  AND  THE  WORKING  PARTY  REPORT 
4. The Chinese legislative framework  as outlined by the Co-Complainants seems to prove the 
existence of an export quota measure within the meaning of Article XI:1 of the GATT 1994.  As 
China's MOFCOM sets the annual quotas for exporta tion of bauxite, coke, fluorspar, silicon carbide 
and zinc in accordance with the relevant la ws and regulations including Measures for the 
Administration of Export Quotas and prohibits  out-of-quota exportation with the penalty of 
administrative and criminal sanction, a fair argume nt could be made that the measure amounts to a 
                                                      
1 See United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from 
Argentina , WT/DS268/AB/R (29 Nov. 2004), at para. 173. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-22 
  
  quantitative restriction that prohibits or restricts the exportation or sale for export of products as the 
panel and the Appellate Body determined in India – Quantitative Restrictions .
2   
5. Information and materials submitted by the Co-Complainants also indicate that China's 
imposition of the export quota constitutes violation of  relevant provisions of the Accession Protocol 
and paragraphs of the Working Party Report.  The me asure particularly implicates Articles 5.1 and 1.2 
of the Accession Protocol and paragraphs 84, 162 and 165 of the Working Party Report.   
6. In this regard, China seems to take the position that its export quota does not implicate "right 
to import or export," but rather it is based on its "right to regulate" which is permitted under 
Article 5.1 of the Accession Protocol. In our view , "right to regulate" may describe the situation 
where the challenged measure does not restrict export per se but rather attempts to address other legitimate administrative purposes such as evalua ting exporting enterprises' demand and capacity 
beforehand or coordinating amounts and timing of e xport to avoid the disruption in the relevant 
domestic markets. China's Measu res for the Administration of Export Quotas, however, hardly 
provides for a mechanism to ensure that the export demand of the applicants, either individually or 
collectively, is to be ultimately accommodated to  the fullest. The measure challenged, therefore, 
seems to be closer to "right to trade" th an "right to regulate" in the spectrum.  
C. ASSUMING
 THE  CO-COMPLAINANTS'  FACTUAL  INFORMATION  IS ACCURATE,  
CHINA'S  EXPORT  DUTIES  SEEM  TO BE INCONSISTENT  WITH  ITS OBLIGATION  
UNDER  THE  ACCESSION  PROTOCOL   
7. The Co-Complainants then clai m that China's export duties fo r certain raw materials are 
inconsistent with China's obligatio n under Article 11.3 of the Accession Protocol.  Korea notes that in 
its first written submission China refutes factual information submitted by the Co-Complainants and 
argues that some measures are no longer in place.  Ko rea believes that in this respect the Panel needs 
to sort out differences in factual information among the parties and confirm the current status of the 
challenged measure.   
8. Even if factual discrepancies are accounted for,  however, the factual information and legal 
arguments submitted by the Co-Complainants tend to show the violation of the relevant provision of 
the Accession Protocol.  For instance, China states  that the export duties are not imposed any more on 
some of the items challenged in this dispute.  But this confirmation, on the other hand, seems to 
indicate the continued imposition of export duties for other raw materials.   
D. TO THE  EXTENT  CHINA'S  EXPORT  LICENSING  IS IMPLEMENTED  AS THE  FINAL  
STEP  FOR  EXPORT  QUOTAS,  IT MAY  BE INCONSISTENT  WITH  CHINA'S  
OBLIGATIONS  UNDER  RELEVANT  PROVISIONS  OF GATT  1994,  ACCESSION  
PROTOCOL  AND  WORKING  PARTY  REPORT 
9. The Co-Complainants also challenge China's export licensing system.  The Co-Complainants 
allege that the export licensing of China "as such " constitutes violation of Article XI:1 of the 
GATT 1994, Articles 5.1 and 1.2 of the Accession Pr otocol and paragraphs 84, 162 and 165 of the 
Working Party Report. Here also, the parties show stark differences in describing factual situations 
and legislative frameworks in place in China.  The ke y difference here is whether the licensing system 
is automatic or non-automatic.   
                                                      
2 See India – Quantitative Restrictions  on Imports of Agricultural,  Textile and Industrial Products , 
WT/DS90/R, (22 Sept. 1999) (upheld by the Appellate Body in its report, WT/DS90/AB/R), at para. 5.128.)  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-23 
  
  10. In its first written submission, China refutes the Co-Complainants' claim that the export 
licensing is non-automatic and discretionary.  The sp ecificity and details of China's explanation seem 
to substantiate its claim that the export licensing is  indeed automatic.  Regardless of the automaticity, 
however, there still seems to be a possibility that the export licensing may implicate Article XI:1 of 
the GATT 1994.  China's explanations of the expo rt licensing describe the measure as being closely 
related to the export quota system and as, in fact, a final step for the administration of export quota.  As China acknowledges, in order to obtain export licenses the exporters of the raw materials must 
submit "quota-granting documents" with other applicati on materials. As all othe r application materials 
are the same between quota product exporters a nd non-quota product exporters, the submission of 
"quota-granting documents" could be considered to be  dispositive in the case of exporters of the raw 
materials subject to the respective quotas.   
11. To the extent the export licensing is administer ed as a final step for the export quotas for the 
above-mentioned raw materials, the export licensing could be regarded as a part of the export quota 
system and thus, the export licensing claim could be  collapsed into the export quota claim, which may 
then implicate violation of Article XI:1 of the GATT 1994 and other relevant provisions in the 
Accession Protocol and the Working Party Report. 
E. A
 CAREFUL  SCRUTINY  SHOULD  BE CONDUCTED  TO DETERMINE  IF THE  
CHALLENGED  MEASURES  COULD  BE JUSTIFIED  UNDER  ARTICLE  XX OF THE  
GATT  1994   
12. Assuming the existence of violation of provisions of the GATT 1994, the Accession Protocol 
and the Working Party Report, China then presents  the claim that its measures are justified under 
Article XX of the agreement, particularly as a measu re necessary to protect human life or health and 
to conserve exhaustible natural resources.   
13. Assuming that China proves these measures are d esigned to protect human, animal or plant 
life or health, the remaining key issue is whether th ey are "necessary" to achieve the objective.  Korea 
submits that the Panel should carefully carry out  its analyses, in accordance with the relevant 
jurisprudence, to confirm that the challenged me asures are justified as "neces sary" to achieve public 
health and environmental protection goals.  
14. China also claims that the measu res at issue are to conserve exhaustible natural resources in 
accordance with Article XX(g) of the GATT 1994. Even  if these raw materials are exhaustible natural 
resources and the measures are to conserve the se resources, it does not seem clear, from China's 
arguments, whether they are made effective in conj unction with restrictions  on domestic production or 
consumption. This requirement, as China also agr ees, is to ensure that the burden of conservation-
related measures is evenly distributed between fo reign trade and domestic trade.  Although the burden 
does not have to be identical between foreign tr ade and domestic trade, the Panel may want to 
examine evidence that the measure imposing Member  has conducted analyses to distribute the burden 
reasonably and proportionally.  WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-24 
  
  ANNEX E-10 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY SUBMISSION  
OF SAUDI ARABIA 
 
 
I. INTRODUCTION  
1. The Kingdom of Saudi Arabia has joined as a third party in this dispute to provide its views 
on a number of fundamental issues relating to the pr oper interpretation of Articles XI and XX of the 
GATT 1994.  These issues are of systemic importance to all WTO Members, particularly developing countries that are pursuing strategies of economic diversification and sustainable development. 
II. EXPORT LICENSING AND GATT ARTICLE XI 
2. The purpose of GATT Article XI is the general elimination of quantitative  restrictions.  The 
Article's interpretation must begin w ith its title, "General Elimination of  Quantitative  Restrictions", 
which forms an integral part of it. Any interpretatio n of Article XI that expa nds its coverage to all 
prohibitions or restrictions, whether or not related to import or export quantities , would render the 
Article's title meaningless. This would be inconsistent  with basic tenants of treaty interpretation, as 
adopted in WTO jurisprudence.
1  
3. In assessing whether a measure is an impermissible restriction on exports, a panel should first 
determine whether it imposes a formal quantitative restriction. If the measure is not a formal 
quantitative restriction, the panel should then analyze  the measure's design, architecture and structure 
to determine whether it has a restrictive effect, and is designed to have a restrictive effect, on export 
quantities.  Several WTO Panels have adopted this analytical framework.2 
4. An export restriction that is permitted by Artic le XI – for example an export duty – may be 
"made effective" through an export licence.  Its func tion is to implement an underlying measure that is 
itself permitted by Article XI.  Thus, an export li censing system which impl ements a permitted export 
restriction will be consistent with GATT Article XI  as long as the system itself does not introduce any 
additional restriction beyond what is necessary to administer the permissible measure . 
5. GATT Article XI permits "automatic" export licensing systems because such systems do not 
impose any restrictions on exports.  Based on the Agreement on Import Licensing Procedures  (ILA), 
"automatic" export licensing could be defined as " licensing where approval of the application is 
granted in all cases," and "non-automatic" export licensing could be defined as a broad residual 
category of licences that are not "automatic", i.e., granted in all cases. Export restrictions that are 
permitted by GATT Article XI – "duties, taxes or other charges" – must be administered by such "non-automatic" licensing because failure to pay the duty, tax or charge would result in the rejection 
of a licence application ( i.e., the licence would not be "granted in all cases").   
6. Given Article XI's express provision for certain  export restrictions, non-automatic licensing 
systems must be allowed to the extent that they ha ve "made effective" such permissible restrictions.  
Thus, non-automatic export licensing will be WTO-consistent whenever  it implements an otherwise 
                                                      
1 See Appellate Body Report, US – Softwood Lumber IV , para. 93.  See also  Appellate Body Report, US 
– Carbon Steel , para. 67 and Appellate Body Report, US – Gasoline , p. 23. 
2 See Panel Report, India – Autos , paras. 7.266-7.268; see also  Panel Report, Colombia – Ports of 
Entry , para. 7.252.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-25 
  
  permissible export restriction in a form that does not  create, and is not designed to create, additional 
limiting conditions beyond what is necessary to admi nister the permitted restriction.  The second 
criterion determines whether the non-automatic li censing system is itself an impermissible 
quantitative restriction, i.e., whether the system imposes, and is designed to impose, additional 
restrictive conditions beyond those n ecessary to administer the measure. 
7. The Panel report in India – Quantitative Restrictions  does not support the complainants' 
conclusion that all non-automatic licensing is inconsis tent with GATT Article XI .  First, the Panel in 
that case did not distinguish between "non-automatic " and "discretionary" licensing systems and never 
explained whether it considered the te rms to be the same or different.
3 Moreover, the licensing 
systems at issue were clearly discretionary.  Thus, the Panel's ruling had nothing to do with the broad 
category of "non-automatic licensing" as that term is meant under the ILA. The Panel should therefore 
reject the complainants' interpretation of India – Quantitative Restrictions .  
III. MINIMUM EXPORT PRICES AND GATT ARTICLE XI 
8. A minimum export price does not impose a nume rical limitation on the quantity of exports, 
and must therefore be examined on a case-by-case basis to determine whether it functions as, and is designed to function as, a prohibited quantitative restriction. For example, a minimum export price that is equal to or lower than th e relevant international price would have no restrictive effect on export 
quantities. Such a system could not limit export volumes in violation of Article XI.  Thus, a standard 
consistent with the Article's text does not support the complainants' view that a minimum export price 
is per se  inconsistent with Article XI.  
9. Prior jurisprudence is of limited relevance in assessing the consistency of minimum export 
prices with Article XI. The GATT Panel ruling in EEC – Minimum Import Prices , on which 
complainants rely, concerned import pricing measu res. There is an important legal distinction 
between minimum import prices and minimum export prices. The former can constitute a type of 
"other duty or charge" imposed on importation in excess of a Member's tariff bindings under GATT 
Article II:1(b). The latter does not implicate any schedule of bound concessions, but rather has the 
effect of "duties, taxes or other charges" on exports that are permitted under Article XI. Thus, 
arguments that rely on direct analogies between minimum import prices and minimum export prices should be treated with caution.  If a minimum export price measure takes the form of a "duty, tax or 
other charge", it is exempt from the prohibition of Article XI.  A ruling to the contrary would impose 
a limitation on Members' unlimited right to employ export duties, taxes or charges.  
IV. GATT ARTICLE XX(G) 
10. The Panel's interpretation of Ar ticle XX(g) should be guided by three fundamental principles.  
First, the term "conservation" of exhaustible natu ral resources in Article XX(g) should be interpreted 
in a manner that recognizes the fundamental public in ternational law principle that each State enjoys 
permanent sovereignty over its natural res ources (PSNR). The Appellate Body noted in US – Gasoline  
that "the General Agreement  is not to be read in clinical isolation from public international law."
4  
Under public international law, States' sovereignt y over their natural resources is part of their 
territorial sovereignty. PSNR has evolved into an est ablished principle of customary international law, 
and comprises the rights of States to explore, e xploit, and dispose of their natural resources for 
national development. 
                                                      
3 Panel Report, India – Quantitative Restrictions , paras. 5.129 and 5.137. 
4 Appellate Body Report, US – Gasoline , p. 17 (original emphasis). See also  Vienna Convention on the 
Law of Treaties, Art. 31.3(c). WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-26 
  
  11. Second, Article XX(g) encompasses the regulat ory autonomy of each Member to determine 
for itself how it wishes to conserve its natural resour ces to meet the development needs of current and 
future generations. The principle of PSNR incl udes the sovereign right, recognized by the United 
Nations, to promote economic and soci al development through the use of natural resources.  This right 
is supported by UN Resolutions on the concept of "sustainable" development, which involves the 
exploitation of resources to meet current and future  development needs.  The objective of "optimal 
use of the world's resources in accordance with th e objective of sustainable development" is also 
explicitly recognized in the Preamble to the WTO Agreement.  As the Appellate Body noted in US – 
Shrimp , "this preambular language reflects th e intentions of negotiators of the WTO Agreement " and 
must therefore "add colour, texture and shading to ou r interpretation of the ag reements annexed to the 
WTO Agreement …."
5  Nothing in the WTO Agreements im poses any obligation to share resources. 
12. Third, a WTO Member exercising its rights to conserve exhaustible natural resources must 
also comply with the strict conditions of the chapeau of Article XX.  PSNR rights do not permit a 
WTO Member to apply any conservation measure in a manner which would constitute a means of 
arbitrary or unjustifiable discrimination, or a disgui sed restriction on international trade.  The chapeau 
acts as a limiting condition on a Member's right to  justify its measures under Article XX, and thus 
demands a high level of scrutiny – higher than that  of provisional justification under the Article's 
exceptions.6  The chapeau "serves to ensu re that Members' rights to av ail themselves of exceptions are 
exercised in good faith to protect interests consid ered legitimate under Article XX, not as a means to 
circumvent one Member's obligations towards other WTO Members."7  It demands an assessment of 
both a measure's provisions and its actual application,8 and is a crucial check on the legitimacy and 
WTO-consistency of a measure provisionally justif ied under one of the paragraphs of Article XX.  
V. CONCLUSION 
13. The parties to this proceeding have raised important systemic issues related to the 
interpretation of GATT Article XI and the scope of  GATT Article XX(g).  Saudi Arabia respectfully 
requests that the Panel consider th e Kingdom's comments on these issues. 
 
                                                      
5 Appellate Body Report, US – Shrimp , para. 153 (original emphasis). 
6 See Appellate Body Report, US – Shrimp , para. 157; Appellate Body Report, US – Gasoline , 
pp. 22-23. 
7 Appellate Body Report, Brazil – Retreaded Tyres, para. 215. 
8 Appellate Body Report, US – Shrimp , para. 160.  See also Appellate Body Report, Brazil – Retreaded 
Tyres,  para. 215.  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-27 
  
  ANNEX E-11 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY SUBMISSION  
OF TURKEY 
 
I. INTRODUCTION 
1. Turkey thanks the Panel for giving the opportuni ty to present its views in this proceeding. 
Turkey takes no position what so ever as to the de fense and allegations presented by the parties on 
whether the specific measure at issue is inconsistent  to the subject provisions of the WTO Agreements 
but, would like to contribute, by expressing its legal analysis on the issues of (1) export duties and (2) export quotas.  
II. EXPORT DUTIES 
2. Although Article XI of GATT 1994 generally proh ibits import export restrictions, it allows 
WTO Members to impose duties on exports. However, in  the case of China, as an integral part of the 
WTO Agreement, commitments in the Accession Protocol and commitments referred to in 
paragraph 342 of the Working Party Report, s hould also be taken into consideration.  
3. Regarding export duties, according to Paragraph 11.3 of the Accession Pr otocol "China shall 
eliminate all taxes and charges applied to exports unl ess specifically provided for in Annex 6 of this 
Protocol or applied in conformity with the provisions of Article VIII of the GATT 1994."  
4. Therefore, in order to determine whether China shall "eliminate all taxes and charges applied 
to exports, the Panel should first decide (i) whet her the financial obligations that China puts on 
exports are the kind of fees and charges covered by Article VIII and applied in conformity with the 
provisions of Article VIII.; and (ii) whether they are specifically provided for in Annex 6 and applied 
in accordance with the terms and conditions specified  for those products in Annex 6.  If answers to 
these two conditions are negative for a product in ques tion and if the measures are not justified by any 
other WTO Agreements than the taxes and charges on exports should be eliminated. 
5. China states in its submission that Article XX of GATT 94 justifies some of its measures. As 
it is well settled by the WTO jurisp rudence, a measure can be justifie d by Article XX, i) if it falls 
under one or another of the particular exceptions listed from paragraphs (a) to (j) under Article XX; 
and ii) if it satisfies the requirements imposed by the opening clauses of Article XX.
1 
6. Without prejudice to its rights to elaborate the specific requirements envi saged in the specific 
paragraphs and the chapeau of Article  XX of the GATT 1994, in this dispute   Turkey would like to 
contribute to the Panel analysis by referring the ne gotiating history of the chapeau and paragraph g, 
which it considers, has value in interpreting them.  
7. The issue of providing exceptions was discussed during the negotiations of the Charter of the 
International Trade Organization (ITO) and the General Agreement on Tariffs and Trade 
(GATT 1947). At the end of the negotiations, the negotiators decided to use . the term  "between 
countries where the same conditions prevail" in the chapeau, instead of the term " foreign countries 
where the same conditions prevail".  
                                                      
1 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 ),  p.22 WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page E-28 
  
  8. With regard to the paragraph g of Article XX,  during the negotiations a proposal was made in 
which it was suggested that, export restrictions should be permitted for the preservation of scarce 
natural resources even if there is no restriction on domestic consumption.
 2 In response to that 
suggestion it was stated that "One of the ways in which export prohibitions could be used ...is for 
protective purposes. It is possible for a raw material  producing country, which wishes to industrialize, 
to do so behind a protective arrangement which is ex tremely effective, and that is preventing anybody 
else getting the raw material to use in his already existing industries"3 Therefore the proposal was not 
accepted.4  
9. In this regard, Turkey is of the view that negotiating history of the GATT XX(g) shed light on 
coverage of the Article and unders tanding the aim of the negotiators. 
III. EXPORT QUOTAS  
10. One of the issues that was sugg ested by China, with regard to export quotas is that  
Article XI:1 shall not apply to measures that carry the characteristics specified in Articles XI:2(a)-(c).. 
In justifying its suggestion China explained that th e relation between Article X:1 and XI:2 is similar 
to those of between Article 27 and 3 of the SCM Agreement and  between Article II.(b) and II.2 of 
GATT 1994.  
A. THE RELATION BETWEEN ARTICLE 27 AND 3 OF THE SCM  AGREEMENT AND ITS SIMILARITY 
TO THE RELATION BETWEEN ARTICLE XI:1  AND XI:2  OF GATT  94 
11. Turkey considers that the relationship between Artic le XI:1 and XI:2 is not similar to that of 
between Articles 27 and 3.1(a) of the SCM Agreement. While Article XI:2 of the GATT 1994 
provides an affirmative defence against the obliga tions brought by Article XI:1, Article 27 of the 
SCM Agreement introduces positive oblig ations for developing countri es in order to exempt them 
from the obligations brought by Ar ticle 3 of the said Agreement.  
12. According to the general interpretation of in ternational law and WTO jurisprudence, the 
burden of proof rests upon the party, whether compla ining or defending, who asserts the affirmative 
of a particular claim or defence.5 In this regard, the party relying on the affirmative defence is obliged 
to prove the existence of the conditions determined in  the so called defence. This is also the case when 
a party relies on one of the excep tions enclosed in GATT XI:2.  
13. However, Article 27 of the SCM Agreement provi des certain conditions for the beneficiary to 
benefit from an exemption from the obligations brou ght by Article 3 of the SCM Agreement, which 
shall be understood as positive obligations, not affirma tive defences. In this regard, if a party claims 
that these positive conditions are not satisfied by the beneficiary country and thus this country should 
not benefit from the exemption, than the claiming party , shall be obliged to prove the lack of such 
conditions. Such as the case in the Appellate Body decision in Brazil - Aircraft .6 
14. For the reasons stated above, in Turkey's  view, the relationship between GATT 94 
Articles XI:1 and X1:2 is different than that of  Articles 27 and 3:1(a) of the SCM Agreement.  
                                                      
2 E/PC/T/C.II/QR/PV/1, p.15 
3 E/PC/T/C.II/QR/PV/1, p.20-21 
4 E/PC/T/C.II/59, p.5 
5 Appellate Body Report, US – Wool Shirts and Blouses , WT/DS33/AB/R, adopted 23 May 1997, and 
Corr.1, DSR 1997:I, 323, p 14 
6 Appellate Body Report, Brazil – Aircraft , WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 
1161, para 140-141  WT/DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1  
 Page E-29 
  
  B. R
ELATION BETWEEN ARTICLE II.(B) AND II.2 OF GATT  94 AND OF ITS SIMILARITY TO THE 
RELATIONSHIP BETWEEN  ARTICLE XI.1  AND XI.2  OF GATT  94 
15. Turkey considers that the relationship betw een Articles II.1(b) and II.2 of GATT 94 and 
Articles XI.1 and XI.2 of GATT 94 do indeed provide sim ilarities. Both of them provide affirmative 
defence against the application of obligations stated  in the previous paragraphs. In this regard, the 
party relying on the affirmative defe nce is obliged to prove the existe nce of the conditions determined 
in the so called affirmative defence Article.  
16. However, the Appellate Body reversed  the burden of proof obligation in India-Additional 
Duties . According to the Appellate Body's reasoning, a case by case evaluation is needed in order to 
determine which party carries the burden of proof, within the scope of GATT Article XI:2. In other 
words, the first thing that the Panel should decide is which party carries the burden of proof. Even if 
the Panel should decide that the complaining Part ies bare the burden of proof, there are certain 
preconditions that should be fulfilled, such as; 
(a) the potential for application of Article XI :2 is to be clear from the face of the 
challenged measure, 
(b) The close relationship between Articles II:1( b) and II:2 exists in Articles XI:1 and 
XI:2 as well, therefore they are also of cl osely inter-related character and are required 
to be read together.  
(c) the party complained against must show that the measure does not breach 
Article XI.1, because of it's justification by Article XI:2.  
(d) the nature and content of the rebuttal submission should contain the rebuttal 
arguments and the evidence thereof, th at substantiate the aim of XI.2.  
17. Therefore, Turkey considers that the relations hip between GATT 94 Articles XI:1 and X1:2 is 
similar to that of between Article II:1(b) and II: 2. However this does not necessarily mean that the 
same approach should automatically be followed in  the case of the application of Articles XI:1 and 
XI:2  
IV. CONCLUSION  
18. Turkey appreciates this opportunity to present its views to the Panel.  
 
_______________ 
 
   WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-1 
  
  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/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-2 
  
  ANNEX F-1 
 
FIRST PHASE OF PRELIMINARY RULING 
 
 
WORLD TRADE  
ORGANIZATION   
WT/DS394/9 
WT/DS395/9 
WT/DS398/8 18 May 2010 
 
 
(10-2762) 
 Original:   English 
  
 
CHINA – MEASURES RELATED TO THE EXPORTATION  
OF VARIOUS RAW MATERIALS 
 
Communication from the Panel 
 
 
 The Panel has asked the Chairman of the Di spute Settlement Body to circulate to the 
Members for their information, the following commun ication dated 7 May 2010 from the Panel to the 
Parties.  
_______________ 
 
 
By means of this communication, the Panel hereby responds to China's request for a 
preliminary ruling dated 30 March 2010, regardi ng the compliance of the Complainants' panel 
requests with the requirements of Article 6.2 of the DSU in the above-mentioned disputes. 
The Panel has carefully examined the views expressed by all Parties and Third Parties with 
respect to China's request.  The Panel has decided to  rule today on some parts of China's request and 
to reserve its decision on other parts.   
 In sum, the Panel today rules as follows: 
 The Panel finds that its terms of reference ar e limited to those measures explicitly identified 
by bullet points in each of the three secti ons of the Complainants' panel requests. 
 Of these measures, the Panel finds that the term "related measures" as referred to in the last 
bullet point in each of the listed measures, is  too broad and undefined a term and therefore 
falls outside the Panel's terms of reference. 
 The Panel decides that its terms of referen ce are not limited to those products falling under 
the tariff lines described in footnotes one to nine  of the panel requests.  The Panel concludes 
that these tariff lines are only indicative of the broad scope of the challenge.    WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-3 
  
   The Panel rules that the panel requests include  the two corrected tariff lines regarding zinc. 
 The Panel finds that the Complainants' clai ms under paragraph 342 of the Report of the 
Working Party on the Accession of China fall outside its terms of reference. 
 The Panel will not consider the preliminar y ruling submitted by the Complainants from a 
separate, ongoing panel proceeding. 
 Until it has examined the Complainants' first written submissions and in order to preserve 
fully China's ability to defend itself, the Panel decides to reserve its decision on: 
 Whether the Complainants' panel requests suffici ently identify the measures at issue and the 
products possibly affected by such measures.  
 Whether the Complainants' panel requests provide  for a summary of the legal basis of the 
complaint sufficient to present the problem clearly. 
 The Panel's detailed analysis of the issues unde r consideration and rulings with respect to 
these issues is hereby annexed. 
 
For purposes of transparency and due process, and having consulted the Parties, the Panel 
intends to send a copy of this communication to a ll Third Parties in the proceedings and will also 
request that this communication be circulated to all WTO Members. 
 
 
 WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-4 
  
  ANALYSIS AND RULINGS BY THE PANEL 
  
1. On 30 March 2010, China filed a request befo re this Panel for a preliminary ruling.
1  China 
asserted that specific sections of the Complainants' panel requests2 for the establishment of this Panel 
(panel requests) are inconsistent with Article 6. 2 of the Understanding on the Rules and Procedures 
Governing the Settlement of Disputes (DSU).3  The Parties presented preliminary written 
submissions.  China commented on the Complainants ' Joint Response to Chin a's preliminary ruling 
request whereas the Complainants di d not comment on China's comments.4  On 29 April 2010, the 
Panel held a hearing with the Parties and a separat e session with the Third Parties on China's request.  
On the same date, the Panel sent written questions to the Parties on China's request.  The Parties 
responded to the Panel's questions on 3 May 20 10 and submitted comments on 5 May 2010 on each 
other's responses. 
2. Essentially, China argues that the Complainan ts' panel requests do not comply with the 
requirements of Article 6.2 of the DSU because th ey do not identify clearly and specifically enough 
which measures are challenged and for which specifi c products.  China also argues that the panel 
requests do not provide a brief summary of the legal basis sufficient to present the problem clearly, as 
the measures identified in Section III of the panel requests are not plainly connected to the list of 
provisions that the Complainants consider to be infringed. 
3. The Panel recalls that the DSU  does not provide for preliminary rulings requests by parties 
although their occurrence has increased recently, nota bly in challenging the jurisdiction of panels 
traditionally based on the Complaining party's panel request. 
4. Article 6.2 of the DSU requires, inter alia , that a panel request identifies the "specific 
measures at issue" and provides "a brief summary of  the legal basis (...) sufficient to present the 
problem clearly".  The need for precision in th e panel requests flows from the two essential purposes 
of the terms of reference, namely, to define the " scope of the dispute" and to serve the "due process" 
objective of notifying the parties and third par ties of the nature of the complainants' case.5  
Compliance with the requirements of Article 6.2 mu st be determined on the merits of each case, 
having considered the panel request as a whole and the parties' first written submission if necessary, 
and in the light of attendant circumstances.6 
                                                      
1 China's request for a preliminary ruling pursuant to Article 6.2 of the DSU, 30 March 2010 (China's 
request). 
2 Request for the Establishment of a Panel by the United States (WT/DS394/7); Request for the 
Establishment of a Panel by the European Communities (WT/DS395/7) and Request for the Establishment of a 
Panel by Mexico (WT/DS398/6). 
3 For instance, see China's request, paras. 3 an d 30, as well as the Annex of China's request. 
4 See China's request; Response of the United States, European Union,  and Mexico to China's request 
(Joint response on 21 April 2010) and China's Comments on the Joint Response (China's comments) (23 April 2010).  The Complainants sent emails on 25 April informing the Panel that they chose not to comment in 
writing on China's comments. This was an optional procedure in the Panel’s timetable for the Preliminary ruling 
proceedings. 
5 Appellate Body Report on EC – Chicken Cuts , para 155 referring to Appellate Body Report on US – 
Carbon Steel, para. 126 (quoting Appellate Body Report on Brazil – Desiccated Coconut , DSR 1997:I, 167, at 
186 (emphasis omitted); and referring to Appellate Body Report on EC – Bananas III , para. 142). 
6 Appellate Body Report on Korea – Dairy , paras. 124-127.  See also, Appellate Body Report on US – 
Carbon Steel, para. 127  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-5 
  
  5. The Panel has given due consideration to the Par ties' requests and arguments.  It has carefully 
examined the Complainants' panel requests in light of both the letter and the spirit of Article 6.2 of the DSU
7, as they define its jurisdiction and terms of refe rence.  The Panel has also taken into account the 
need to ensure China's ability to defend itself8 and its right to be well informed of the Complainants' 
case, as well as the right of the Complainants to  have a prompt resolution of the disputes9 in 
accordance with Article 3.3 of the DSU, while keepi ng in mind that "[t]he procedural rules of WTO 
dispute settlement are designed to promote, not th e development of litigation techniques, but simply 
the fair, prompt and effective resolution of trade disputes."10 
6. Taking into account all these elements, the Panel issues its preliminary ruling on the 
following aspects. 
THE MEASURES CHALLENGED  
7. China claims that in their panel requests the Complainants failed to sufficiently identify the 
measures they challenge.11  China's main focus is on the allege d lack of defined products covered by 
each challenged measure.  Before addressing this argument from China, the Panel will discuss two 
sets of terms used by the Complainants in thei r panel requests of concern to the Panel itself:12 the use 
of "among others" preceding the lists of challenged measures and the reference to "any amendments 
or extensions; related measures; replacement measures; renewal measures; and implementing 
measures" to any of the listed measures, as identifie d in the last bullet point of each of the listed 
measures in each of the three sections of the Complainants' panel requests.  
8. The Panel recalls that within the meaning of Article 6.2 of the DSU, a panel request must 
specify the measures challenged.  The Panel is aw are that the obligation to identify the specific 
measure at issue does not oblige the complainant to set forth the "precise content" of the measure in 
its panel request.  Instead, the Appellate Body f ound that "although a measure cannot be identified 
without some indication of its contents, the iden tification of a measure within the meaning of 
Article 6.2 needs be framed only with sufficient pa rticularity so as to indicate the nature of the 
measure and the gist of what is at issue."13  A measure may thus be identified by its substance or 
nature14, so long as what is referred for adjudicatio n by a panel may be discerned from the panel 
request.15 
9. As the goal of such requirements is, inter alia , to ensure that the defendant is well aware of 
the scope of the challenge it faces in a dispute, the Panel believes that the defendant in any panel 
procedure must know clearly which of its measure s are challenged.  So "as a general rule, the 
                                                      
7 Appellate Body on EC – Bananas III , para. 142. 
8 Appellate Body Report on US – Carbon Steel, para. 127.  See also, Appellate Body Report on Korea 
– Dairy , para. 127. 
9 Regardless of the fact that ther e are three complaints (DS394, DS39 5 and DS398) which implies three 
different disputes, the Panel will refe r in its subsequent communications to "dispute" when referring to the 
process of this current Panel. 
10 Appellate Body Report on US – FSC , para. 166. 
11 For instance, see China's request , paras. 13-19 and 59-66; and China's comments, paras. 10-32. 
12 The Panel has the right and obligation to address issues even if the parties to the dispute remain silent 
on those issues.  Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US) , para. 35. 
13 Appellate Body Report on US – Continued Zeroing , para. 169. 
14 Panel Report on Argentina – Footwear (EC) , para. 8.40.  See also,  Panel Report on EC – Approval 
and Marketing of Biotech Products,  para. 7.47. 
15 Appellate Body Report on US – Continued Zeroing , para. 168. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-6 
  
  measures included in a panel terms' of reference must be measures that are in existence at the time of 
the establishment of the panel".
16  
1. "among others" 
10. The panel requests contain an introductory para graph and then three sections.  Each section 
refers to a generic type of measure – export quotas,  export duties and additional restraints imposed on 
exportation.  Each section is composed first of na rrative paragraphs describi ng what the complainants' 
consider generally to be the "problem",  second, of  a list of challenged legal instruments and finally, 
of a list of the WTO obligations alleged to have been violated by the listed measures. 
11. The Panel is concerned with certain aspects of the three lists of challenged measures.  After 
the narrative paragraph(s) in each of the three secti ons, the Complainants identify the lists of measures 
with the following phrase: "...these Chinese measures are reflected in, among others " (emphasis 
added).  This phrase indicates that the measures listed by bullet points in the panel requests are not the 
only measures allegedly inconsiste nt with WTO obligations and leaves open the possibility that the 
Complainants might include additional me asures in subsequent submissions.   
12. The Panel is of the view that the Complain ants cannot be allowed to include additional 
measures other than those listed and identified by bul let points in the panel requests.  Such an "open 
ended" list would not contribute to the "security and predictability" of the WTO dispute settlement 
system as required by Article 3.2 of the DSU. 
13. For this reason, the Panel considers that only the listed measures explicitly identified by bullet 
points in the three sections of the Complainants' panel requests fall within the Panel's terms of 
reference and will thus be examined by the Panel. 
2. "as well as any amendments or extensio ns; related measures; replacement measures; 
 renewal measures; and implementing measures" 
14. In response to the Panel's questions during the preliminary ruling hearing, the Complainants 
suggested that they do not intend to introduce ne w measures and that the phrase "among others" is 
intended to cover the same situations as those envisag ed by the last bullet point of each of those three 
lists which reads "as well as any amendments or ex tensions; related measures;  replacement measures; 
renewal measures; and implementing measures". 
15. The Complainants add that the purpose of the "among others" phrase, as well as the last bullet 
in the list of legal instruments referring to "a ny amendments or extens ions; related measures; 
replacement measures; renewal measures; and implementing measures" is to make clear that the 
Chinese legal instruments that the Co mplainants have been able to identify to date may not be the 
only ones through which China maintains the measures at issue, and to specifically include such 
instruments within the Panel's terms of reference.17   
16. The Panel shares the concern that a respondent s hould not be allowed to unilaterally modify 
one or more of the initially challenged measures with a view to avoiding a Panel's jurisdiction.  At the 
same time, measures to be included in the Panel's te rms of reference should generally exist at the time 
of the filing of the panel request.  There are none theless situations where new governmental actions 
were considered to be so closely linked to the cha llenged measure that they were also considered to 
                                                      
16 Appellate Body Report on EC – Chicken Cuts , paras. 156. 
17 Complainants' answer to the Panel's questions after the preliminary ruling hearing, para. 19.  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-7 
  
  have been captured by the Panel's initial terms of reference.  Amendments to challenged legislation 
that do not change the "essence" of the initial m easure bring the amended measure under the initial 
terms of reference.
18  The same was said when the initial m easure expired and was replaced by a new 
one or when the effect of the new (implemen ting) measure is the same as the expired one.19  However, 
in EC – Chicken Cuts  two related measures were adopted  during the panel process but were 
considered to be excluded from the terms of reference because, alt hough related to the same matter 
and having the same effect, they were not amendments  to the original measure s with the same essence 
as the original measures. 
17. In the Panel's view, undefined "related measur es" is too broad a term and does not allow 
China to know clearly what specifi c measures are being challenged in the current disputes.  For this 
reason, the Panel believes that the Complainants cannot add to their list of challenged measures a 
broad scope of "related measures".20   
18. Therefore, the Panel will not read the last bulle t point of each of the three lists of specific 
measures as referring to any "related measures". 
19. With regard to the reference to "implemen ting measures", it is not clear whether the 
Complainants refer to domestic implementing measur es or whether they seek to include the measures 
that China may have to implement if the Complainan ts were to succeed in this current challenge.  The 
Panel reads these terms to refer to actions ta ken by China to implement existing challenged 
measures.21  
20. For this reason, the Panel considers that only the listed measures explicitly identified by bullet 
points in the three sections of the Complainants' panel requests - as well as any future amendment(s) 
or extensions, replacement measures, renewal measures and implementing measures, as described above by the Panel - fall within the Panel's terms of reference and will thus be examined by the Panel. 
3. Whether the identification of the measures requires the specification of the products 
 concerned 
21. China claims that in their panel requests the Complainants failed to sufficiently identify the 
measures they challenge because the Complainants do not adequately specify which specific products 
are covered by each challenged measure.
 22  In order to properly identif y the challenged measures, and 
since many of the listed measures are laws of genera l application, China argu es that the Complainants 
should have identified the specific products for each of  the measures.  In response, the Complainants 
assert that they have clearly listed the basic products concerned by the dispute.23  The Complainants 
argue that the reference to "various forms " of the nine materials mentioned in the introductory 
paragraph of the panel requests, as well as th e descriptive list of tariff lines included through 
footnotes one to nine, seek to provide exampl es of the broad scope of their challenge.24  In turn, China 
                                                      
18 Appellate Body Report on Chile – Price Band System , para. 139. 
19 Appellate Body Report on US – Upland Cotton  (21.5), para. 270 
20 The Appellate Body noted in a case that the phrase "implementing measures and other related 
measures" does not identify th e specific measures at issue as required in Article 6.2 of the DSU.  Appellate 
Body Report on EC – Selected Customs Matters , para. 152, footnote 369. 
21 The Panel will not read this phrase as involving a measure subject to proceed ings under Article 21.5 
of the DSU. 
22 For instance, see China's request , paras. 13-19 and 59-66; and China's comments, paras. 10-32. 
23 Joint Response, paras. 13-22. 
24 Ibid. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-8 
  
  seeks to have the scope of the disputes limited to th e explicit tariff lines listed in footnotes one to nine 
regarding each product mentioned in the intr oductory paragraph of those panel requests.
25  
22. The Panel notes that the Complainants identifie d in their panel requests nine "materials"26: 
bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus 
and zinc.27  The Complainants added a footnote to each of these materials.  In each footnote, the 
Complainants stated that each material "incl udes but is not limited to" a series of tariff lines.28  The 
Panel understands that the introduc tory paragraph of the Complain ants' panel requests serves to 
describe generally the scope of the Complainants' ch allenge.  In that introductory paragraph, the 
Complainants state, in a general manner their concer ns over export-related rest rictions alleged to be 
imposed by China through measures concerned with those nine materials.  Then, in each of the 
following three sections in their panel requests, the Complainants submit the legal description or 
framework of their challenge against the specific measures imposing generally "export quotas", 
"export duties" and "additional restraints imposed on  exportation", alleged to be maintained by China 
on (some of) those nine products.  Accordingly, the Panel understands that each of the listed measures 
identified in each of the three sections of the panel requests will cover one, some or all of the nine 
materials mentioned in the introducto ry paragraph of the panel requests. 
23. The Panel considers that the Complainants could also have identified for the nine materials at 
issue, each and every potentially rele vant tariff line, or they could have  stated that their claims target 
"all" tariff lines between X,Y or Z HS lines concerned by each of the nine products identified.  But the 
Complainants chose to only announce the broad scope of their challenge and seem to have wanted to 
provide more specificity only in the following thr ee sections of their panel requests.  Indeed, the 
following three sections of each panel request then list the specific measures covering, one or more of 
the nine materials listed in the introductory paragraph.   
24. In the Panel's view, the introductory paragraph offers a general presentation of the dispute and 
the more specific elements of the challenge are incl uded in Sections I, II and III of the panel requests.  
If the first general listing of products mentioned in  the introductory paragraph does not fully inform 
China of the exact scope of the products concer ned by the dispute, the measures listed in the 
following sections - the Chinese legal instruments - are alleged to provide more specificity.  In other 
words, each of these Chinese legal instruments has a specific product application that covers one, 
some or all of the products listed in the introductory paragraph of the panel request.29 
25. The Panel, therefore, rejects China's claim that the terms of reference of this Panel are limited 
to the measures represented by the tariff lines listed in the footnotes to the products mentioned in the 
introductory paragraph of the Complainants' panel requests.   
26. The Panel agrees with China that the claims n eed to be as clear as possible and as early as 
possible in the panel process so as to allow China to  defend itself fully.  The Panel is also aware that 
pursuant to Article 19 of the DSU, it can u ltimately only make recommendations on specific 
provisions of specific measures and therefore may need  to consider and examine the specific situation 
of specific challenged instruments as they apply to specific products or group of products.  
                                                      
25 China's request, paras. 13-19.  See also, China's comments, para. 31. 
26 By "materials", the Panel also understands "products". 
27 As noted in para. 29 of China's request, the Co mplainant's panel requests are nearly identical.  
Therefore, any reference to the panel requests refer to any of the documents referred to in footnote 2. 
28 See footnotes one to nine of the panel requests. 
29 Appellate Body Report on EC – Chicken Cuts , para. 165-66.  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-9 
  
  27. Even if, as noted above, the Complainants' panel requests could have been more detailed, in 
that the Complainants could have identified the measures and the materials they referred to
30, the 
Panel is of the view that when it is requested to ass ess the clarity of a panel request, with reference to 
the requirements of Article 6.2 of the DSU, it has to consider the panel request as a whole31 and as 
part of an integrated and evolving panel process.  The Panel believes that there is a possibility that the 
parameters of some challenged measures will be clarified by the Complainants' first written submissions.  Therefore, in the Panel's view, the ove rall sufficiency of a panel request and whether the 
right of the respondent to defend itself adequate ly was or was not prejudiced, may be better 
determined in light of the Pa rties' first written submissions.
32 
28. In that context, the Panel notes in particular the undertaking by a representative of the 
Complainants that this preliminary procedure is somewhat premature and that all possible concerns 
over the undefined scope of their challenge will be  answered once China and the Panel receive the 
Complainants' first written submissions. 
29. In light of the above, the Panel decides to reserve  its decision on this part of China's request 
and to rule on it at a later stage once it has examined the Parties' first written submissions and is able to take full account of China's ability to defend itsel f.  In that context, the Panel notes that it has 
provided China with a long period of time to res pond to the Complainants' first written submissions.  
The Panel is not saying that all flaws in a pane l request can be cured by a first written submission
33 
but rather that after the parties' first written s ubmission, the Panel will be in a better position to 
determine whether China has suffered any prejud ice by the Complainants' panel requests while 
ensuring that this panel pr ocess is not unduly delayed. 
4. The specific problem of the typographical error of the HS line regarding the zinc 
30. China requested that the Panel exclude from its terms of reference any claims concerning two 
tariff lines erroneously identified by the Complainants in the context of zinc.34  As soon as they 
became aware of this error, the Complainants admi tted that these two tariff lines were typographical 
errors and referred (the Pa nel and the complainants) to the correct tariff lines.35  In response to a Panel 
question and at the request of the Panel, China accepted the correction of these two typographical 
errors and it made clear that China's understanding of the panel requests includes the "corrected tariff 
lines".36 
31. In light of China's response, the Panel will al so read the panel requests as including the two 
corrected tariff lines.   
                                                      
30 Appellate Body Report on EC – Chicken Cuts , para. 165-66.  However, in paragraph 167 of this 
same ruling, the Appellate Body recognized that under some circumstances it may be necessary to identify the 
products at issue. 
31 Appellate Body Report on Korea – Dairy , paras. 124-127.  See also: Appellate Body Report on US – 
Carbon Steel, para. 127. 
32 Appellate Body Report on US – Carbon Steel , para. 127. 
33 Appellate Body Report on EC – Bananas III , para. 143. 
34 China's request, para. 66 an d China's comments, para. 32. 
35 Footnote 15 and para. 18 of the Joint Response.  During the hearing for the preliminary ruling 
request, a representative of  the Complainants admitted that they b ecame aware of it in the course of the 
proceedings. 
36 China's answer to the Panel's questions afte r the preliminary ruling hearing, paras. 4-5. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-10 
  
  T
HE REQUIREMENT TO PROVIDE A BRIEF SUMM ARY OF THE LEGAL BASIS OF THE COMPLAINT 
SUFFICIENT TO PRESENT THE PRO BLEM CLEARLY WITH REGARD TO SECTION III OF THE PANEL 
REQUESTS  
32. China submits that the Section III of the Comp lainants' panel requests do not provide a brief 
summary of the legal basis of the complaint suffici ent to present the problem clearly, contrary to the 
requirements of Article 6.2 of the DSU.  For China,  this is because in Section III there is no clear 
connection between the listed measures, the list of WTO provisions claimed to be violated and the 
narrative paragraphs that describe generally how "som e" of the listed measures are inconsistent with 
"some" WTO disciplines.37  China claims that this lack of cl arity is exacerbated by the Complainants' 
subsequent contradictory argument that "all" 37 listed measures are inconsistent with "all" 13 listed 
WTO obligations.  According to China, such a "double listing" approach is contrary to the 
requirement of Article 6.2 of the DSU to provide a brief summary of the legal basis of the complaint 
sufficient to present the problem clearly.38 
33. In the Panel's view, whether the mere listing of articles of a particular WTO agreement is 
sufficient to comply with the requirement to provi de a summary of the legal basis of the complaint39, 
is to be determined on a case-by-case basis.40  In some instances, especially if a provision contains 
multiple obligations within it, a mere listing would not be sufficient to satisfy the obligation in 
Article 6.2.41    
34. In that context, the Panel notes in particular that: 
"a 'brief summary of the legal basis of the complaint' required by Article 6.2 of the 
DSU aims to explain succinctly how or why the measure at issue is considered by the 
complaining Member to be violating the WTO obligation in question.  This brief 
summary must be sufficient to present the problem clearly.  Taken together [with the identification of the measures at issue], these different aspects of a panel request 
serve not only to define the scope of a dispute, but also to meet the due process 
requirements."
42 
35. The Panel recalls that Section III of the pa nel requests, entitled "Additional Restraints 
Imposed on Exportation", comprises three sub-parts: fi rst, it contains narrative paragraphs, then a list 
of measures and, finally, the WTO provisions that  the Complainants consider are infringed by the 
listed measures.  The narrative paragraphs descr ibe generally the types of measures that the 
Complainants are challenging and points to some of their WTO inconsistency.  In the Panel's view, 
these narrative paragraphs aim at explaining su ccinctly how and why some of the challenged 
measures at issue are inconsistent with some of the WTO principles. Then, the listed legislative instruments identified by bullet points appear to be the more specific measures alluded to in the 
narrative paragraphs; the final part provides a list of  all WTO obligations that would be violated by 
one or all of the listed measure. 
                                                      
37 For instance, see China' s request, paras. 48-58. 
38 For instance, see China's comments, paras. 48-63. 
39 Appellate Body Report on Korea – Diary, para. 124.   
40 Appellate Body Report on Korea – Diary, para. 127. 
41 Appellate Body Report on Korea – Dairy , para. 124. 
42 Appellate Body Report on  EC – Selected Customs Matters , para. 130.  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-11 
  
  36. The Panel agrees with China that the Compla inants' argument that all the listed measures 
violate all the listed WTO obligations seems to cont radict the substance of the narrative paragraphs 
that some (groups of) measures are inconsistent  with some of the listed WTO obligations.   
37. However, as noted before, the Panel is aware th at WTO panel proceedings are an integrated 
and evolving process and the sufficiency of a panel re quest is to be determined by taking into account 
the Parties’ first written submissions in order to  assess fully whether the ability of the respondent to 
defend itself was prejudiced.
43 
38. In that context, the Panel notes, in particul ar, the undertaking from a representative of the 
Complainants that this preliminary procedure is somewhat premature and that all possible concerns 
over the undefined scope of their challenge will be  answered once China and the Panel receive the 
Complainants' first written submissions.   
39. In light of the above, the Panel decides to reserve  its decision on this part of China's request 
and to rule on it at a later stage, once it has examined  the Parties' first written submissions and is more 
able to take fully into account Chin a's ability to defend itself.  In that  context, the Panel notes that it 
has provided China with an extensive period of time to respond to the Complainants' first written 
submissions.  The Panel has already noted that it is not saying that all flaws in a panel request can be 
cured by a first written submission44 but rather that after the parties' first written submission, the Panel 
will be in a better position to determine whet her China has suffered any prejudiced by the 
Complainants' panel requests while ensuring that  this panel process is  not unduly delayed. 
THE COMPLAINANTS ' WITHDRAWAL OF THEIR CLAIMS UNDER PARAGRAPH 342 OF THE REPORT 
OF THE WORKING PARTY ON THE ACCESSION OF CHINA  
40. The Panel notes that the Complainants have in formed China and the Panel that they do not 
intend to pursue any claims regarding China's ob ligations under paragraph 342 of the Working Party 
Report on the Accession of China and referred to in S ection II of their panel request via Article 1.2 of 
China's accession Protocol.45   
41. Therefore, the Panel rules that these specific clai ms fall outside the Panel's terms of reference.  
THE REFERENCE TO A PRELIMINARY RULING FROM ANOTHER PENDING CASE  
42. The Complainants submitted in support of thei r allegations, a copy of a preliminary ruling 
issued by another panel in an ongoing case.  Korea, as the respondent in this other dispute and a Third 
Party in the present one, requests the Panel to re frain from taking into account in any way this 
preliminary ruling.  China shares Korea's concerns.46 
43. The Panel notes that this preliminary ruling w as not circulated to WTO Members and is not 
yet an official WTO document within the meaning of the Decision on Derestriction.47  The Panel 
notes also that WTO dispute proceedings are genera lly understood to be c onfidential unless otherwise 
determined by panels with the agreement of the parties.   
                                                      
43 Appellate Body Report on US – Carbon Steel , para. 127. 
44 Appellate Body Report on EC – Bananas III , para. 143. 
45 Joint Response, para. 35. 
46 China's answer to the Panel's questions af ter the preliminary ruling hearing, para. 13. 
47 Procedures for the Circulation and Derestriction of WTO Documents, WT/L/452, adopted on 
14 May 2002. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-12 
  
  44. In light of this, the Panel will not consider th is  preliminary ruling issued in another ongoing 
panel process.  The Panel also requests the Parties to  omit any further reference to this preliminary 
ruling or any other document illustratin g panel deliberations from pending cases. 
C
ONCLUSION  
45. The Panel has decided to issue its preliminary ruling in two stages.48  In issuing the ruling in 
this manner, the Panel has kept in mind that acco rding to Article 3.10 of the DSU, the Parties are 
required to engage in dispute settlement procedures "in good faith in an effort to resolve the dispute".   
46. The Panel has ruled on issues which are relevant to its own jurisdiction and that could not be 
clarified by the parties' first written submission or at any other stage during this panel process.  The 
Panel reserves its decisions on China's request  that the Complainants' panel requests do not 
sufficiently identify the product coverage of each of the listed measure and do not comply with the 
requirements of Article 6.2 of the DSU.  The Panel expects that the Complainants will clarify in their 
first written submissions which of the listed meas ures (or group thereof) for which specific products 
(or group thereof) are inconsistent with which speci fic WTO obligations among those listed in the last 
part of Section III of their panel requests.  In ruling this way, the Panel wants to ensure that China is 
able to defend itself appropriately and that  this panel process is  not unduly delayed. 
47. The Panel reserves its decision to develop its reasoning regarding each aspect of its 
preliminary ruling in a subsequent ruling or in its final report.   
 
_______________  
 
 
                                                      
48 We also note that there is no established jurisp rudence nor is there any established practice as to 
whether a panel needs to rule on the scope of its terms of reference on a preliminar y basis, i.e. before the 
issuance of its Report to the parties. See also Appellate Body Report, US – Carbon Steel , para. 123.  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-13 
  
  ANNEX F-2 
 
SECOND PHASE OF PRELIMINARY RULING 
 
China – Measures Related to the Exportation of Various Raw Materials 
WT/DS394, DS395, DS398 
 
Second Phase of the Preliminary Ruling  
 
 1. By means of this communication, the Panel hereby informs the parties of its decision on 
certain matters pertaining to China's request dated 30 March 2010 for a preliminary ruling regarding 
the consistency of the complainants' Panel requests with Article 6.2 of the Understanding on the Rules 
and Procedures Governing the Settlement of Disputes (DSU). 
2. For purposes of transparency and due process, a nd having previously consulted the Parties, 
the Panel intends to send a copy of this communicati on to all Third Parties in the proceedings and will 
also request that this communication be circulated to all WTO Members. 
3. On 30 March 2010, China filed a request before th is Panel for a preliminary ruling.  In its 
request, China asserted that specific sections of the complainants' requests for the establishment of 
this Panel
1 (Panel requests) are inconsistent with Articl e 6.2 of the DSU.  The parties commented on 
China's request in subsequent submissions.  On 29 Ap ril 2010, the Panel then held a hearing with the 
Parties and a separate session with the third parti es on China's request.  On the same date, the Panel 
sent written questions to the Parties regarding Chin a's request.  The Parties responded to the Panel's 
questions on 3 May 2010 and submitted comments on 5 May 2010 on each other's responses.   
4. On 7 May 2010, the Panel informed the parties of  its intention to rule on China's request in 
two phases.  In this communication,2 the Panel addressed, in a firs t phase, those issues that it 
considered were relevant to the Panel's jurisdic tion that could not be clarified by the parties' 
subsequent first written submissions or at an y other stage during this panel process.   
5. In this first phase, the Panel recalled that Article  6.2 of the DSU serves to define the "scope of 
the dispute" as well as "due process" objectives thr ough the requirements that a complainant's Panel 
request must identify the "specific measures at issue" and provide "a brief summary of the legal basis 
sufficient to present the problem clearly".   The Panel made the following rulings: 
 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. 
 Of these measures, the term "related measures" re ferred 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. 
                                                      
1 Request for the Establishment of a Panel by the United States (WT/DS394/7); Request for the 
Establishment of a Panel by the European Communities (WT/DS395/7) and Request for the Establishment of a Panel by Mexico (WT/DS398/6). 
2 WT/DS394/9, WT/DS395/9, WT/DS398/8. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-14 
  
   The Panel's terms of reference are not limited to those products falling under the tariff lines 
described in footnotes one to nine of the Pa nel requests; rather, these tariff lines are only 
indicative of the broad scope of the challenge.   
 The Panel requests include the two corrected tariff lines regarding zinc. 
 The complainants' claims under paragraph 342 of the Report of the Working Party on the 
Accession of China fall outside the Panel's terms of reference. 
 The Panel will not consider the preliminary ruling submitted by the complainants in a 
separate, ongoing panel proceeding. 
6. In addition to these rulings, the Panel indicat ed that it would reserve its decision on two 
remaining issues until after it had received the co mplainants' first written submissions.  These two 
issues are: 
 Whether the complainants' Panel requests suffici ently identify the products concerned by the 
challenged measures; and 
 Whether Section III of the complainants' Panel requests provides a summary of the legal basis 
of the complaint sufficient to present the problem clearly, in particular whether the complainants established sufficient "connections" between the alleged claims and violations. 
7. In deciding to reserve its decision on these two issues, the Panel acknowledged that not all 
flaws in a Panel request can be cu red by a first written submission.
3  However, it noted at the same 
time that WTO panel proceedings are an integrated and evolving process.  The Panel also took note of 
the statement from a representative of the complainan ts that any possible concerns over the undefined 
scope of their challenge would be answered in th e complainants' first written submissions.  The Panel 
thus considered it appropriate to assess the sufficien cy of the Panel requests by taking into account the 
parties first written submissions. Having done so, it would be in a position to assess fully whether 
China had been prejudiced in its ability to defend itself.4  The Panel also sought to ensure that the 
Panel process was not unduly delayed. 
8. The first phase of the Panel's preliminary ruling was circulated as WTO document 
WT/DS394/9, 395/9, 398/9.   
9. The Panel has received and examined the partie s' first written submissions, and has heard the 
parties' further oral arguments regarding China' s preliminary ruling request. The Panel has also 
considered the parties' answers to the Panel's questions5 and their respective comments on each other's 
answers.6  The Panel turns now to the two remaining issues set out in paragraph 6 above. 
                                                      
3 Appellate Body Report on EC – Bananas III , para. 143. 
4 Appellate Body Report on US – Carbon Steel , para. 127. 
5 Reference made in this ruling to responses to questions of the Panel by the parties means those 
responses provided by the parties on 13 September 2010 to the questions posed by the Panel. 
6 Reference made in this ruling to comments to the responses to questions of the Panel by the parties 
means those comments provided by the parties on 17 September 2010 to the responses provided by each other to 
the questions posed by the Panel.  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-15 
  
  A. W
HETHER IN FAILING TO IDENTIFY THE PR ODUCTS AT ISSUE THE COMPLAINANTS HAVE 
THEREFORE FAILED TO PROPERLY ID ENTIFY THE CHALLENGED MEASURES  
10. In its request for a preliminary ruling, China claimed that the complainants failed in their 
Panel requests to identify sufficiently the measures they challenge because th e complainants' requests 
do not adequately specify which specific produc ts are covered by each challenged measure.7 China 
argued that many of the listed measures are laws of  general application, and that the complainants 
should have identified the specific products at issu e for each of the measures set out in the Panel 
requests.  In response, the compla inants asserted that they had clearly  listed the products concerned by 
the dispute.8  The complainants argued that the reference to "various forms" of the nine materials 
mentioned in the introductory paragraph of the Pane l requests, as well as the descriptive list of tariff 
lines included through footnotes one to nine in the Panel requests, provide examples of the broad 
scope of their challenge.9  In turn, China sought to have the scope of the disputes limited to the 
explicit tariff lines listed in f ootnotes one to nine regarding each product mentioned in the 
introductory paragraph of the Panel requests.10    
11. The Panel noted in the first stage of its prelim inary ruling that the introductory paragraph of 
the complainants' Panel requests offers a general presentation of the dispute, and the more specific 
elements of the challenge are included in Sectio ns I, II and III of the Panel requests.  While 
recognizing that relying exclusively on the products identified in the first paragraph could lead to 
confusion as to the precise scope of the claims, th e Panel considered that the measures listed in the 
following sections – certain Chinese legal instruments – could clarify whether some or all of the nine 
materials were covered.  In other words, each of the Chinese legal instruments potentially would have 
to have a specific product application that covers  one, some or all of the products listed in the 
introductory paragraph of the Panel requests.  The Panel clarified that in any case the complainants' 
claims would not be limited to products covered by the particular tariff lines identified in the 
complainants' Panel requests.  In this context, th e Panel reserved its ruling on whether the challenged 
measures identified sufficiently which products form  the basis of each of the claims.  The Panel 
emphasized the need to ensure that China w ould be able to defend itself adequately.  
12. In general, unless the identification of a pro duct at issue defines the specificity of the 
challenged measure,  panel Requests need not speci fically identify the prod ucts covered by each of 
the claims.  The Appellate Body in EC – Chicken-Cuts  explained as follows: 
"Article 6.2 of the DSU does not refer to th e identification of the products at issue;  
rather, it refers to the identification of th e specific measures at issue.  Article 6.2 
contemplates that the identification of the products at issue must flow from the specific measures identified in the panel requ est.  Therefore, the identification of the 
product at issue is generally not a separate a nd distinct element of a panel's terms of 
reference; rather, it is a consequence of the scope of application of the specific 
measures at issue.  In other words, it is the measure  at issue that generally will define 
the product  at issue. 
At the same time, we acknowledge that the Appellate Body held, in EC – Computer 
Equipment ,  that, with respect to certain WTO obligations, in order to identify the 
                                                      
7 See China's preliminary ruling request, paras. 13-19 and 59-66; and China's comments, paras. 10-32. 
8 Joint Response of the complainants to China's request for a preliminary ruling, paras. 13-22. 
9 Ibid. 
10 China's preliminary ruling request, paras. 13-19.  See also China's comments on the joint response, 
para. 31. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-16 
  
  specific measures at issue, it may be neces sary also to identify the products at 
issue.
11"12 
13. In this dispute, the challenged measures would ha ve to have specific product applications that 
cover one or several of the products listed in the in troductory paragraph of th e Panel requests.   The 
Panel recognizes that there may be situations where products should be identified specifically in order 
to ensure clarity with respect to the measures at i ssue. Therefore, the Panel reviewed the complainants' 
Panel requests and first written submissions with this in mind.  The Panel acknowledges that the 
complainants' separate Panel requests might each ha ve provided further detail on which products were 
at issue with respect to each of th e measures.  However, the Panel c onsiders that in their first written 
submissions, as well as in statements made during the first substantive meeting of the Panel with the 
parties, the complainants brought further preci sion on which products are concerned with each 
specific challenged measure, whether in relation to China's Accession Protocol, China's Working 
Party Report, or the GATT 1994.   
14. In Section I of their Panel requests13, pertaining to export quotas, the complainants explain 
that they are challenging the imposition of export qu otas by China in terms of the legal instruments 
specified therein (listing 25 legal instruments), and regarding the following five products: bauxite, 
coke, fluorspar, silicon carbide, and zinc. 
15. Furthermore, the United States, Mexico and the European Union confirmed in 
paragraphs 104, 107, and 70 of their first written submissions, respectively, that the following five 
products are subject to export quot as: bauxite, coke, fluorspar, silic on carbide, and zinc. From these 
products, bauxite, fluorspar, and silic on carbide are identified in c onnection with quotas allocated by 
bidding (bauxite, fluorspar, and silicon carbide), while  coke and zinc are identified in connection with 
quotas allocated directly.  The complainants furthe r identified in their responses to question No. 2 
posed by the Panel, the legal instruments in conn ection with export quotas for which they are seeking 
recommendations.  During the first panel meeting, th e complainants also jointly filed Exhibit JE-134 
in which they specify the precise raw materials, and the product names in short form, that pertain to 
their claims relating to export duties and export quotas.14 
16. In light of the identification of the relevant ma terials, the Panel considers that China has been 
able to put forward specific defences with respect to  these claims. This is reflected in the fact that 
China's asserted defences related to the imposition of several of the export quotas at issue. This 
supports the conclusion that the complainants suffici ently identified the scope of their claim on export 
quotas.  For instance, in Section VI(C) of its firs t written submission, China argues that Article XI:1 
of the GATT 1994 does not apply to export quotas app lied to refractory-grade bauxite, by virtue of 
                                                      
11 (footnote original) The A ppellate Body stated in EC – Computer Equipment : 
"We note that Article 6.2 of the DSU does not  explicitly require that the products to which the 
'specific measures at issue' apply be identif ied.  However, with respect to certain WTO 
obligations, in order to identify  'the specific measures at issue', it may also be necessary to 
identify the products subject to the measures in dispute."  
(Appellate Body Report, EC – Computer Equipment , para. 67) (emphasis original). 
12 Appellate Body Report on EC – Chicken Cuts , paras. 165-66. 
13 Request for the Establishment of a Panel by the United States (WT/DS394/7); Request for the 
Establishment of a Panel by the European Communities (WT/DS395/7) and Request for the Establishment of a Panel by Mexico (WT/DS398/6). 
14 The Panel notes that the complainants submitted Exhi bit JE-134 to illustrate the precise products for 
which China has raised an affirmative defense, either under Article XI:2(a) of the GATT 1994 (in the case of refractory grade bauxite), or under Article XX of the GATT 1994 (in the case of refractory grade bauxite, coke 
and silicon carbide).  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-17 
  
  Article XI:2(a) of the GATT 1994. Also, in Sections  VI(D), and VI(E) of its first written submission, 
China argues that the export quotas applied to refractory grade baux ite, coke and silicon carbide are 
justified pursuant to Article XX of the GATT 1994. In addition, China responded to the Panel's 
questions following the first substantive meeti ng and commented on the answers provided by the 
claimants.
15  
17. Therefore, with regard to the export quotas referr ed to in Section I of the Panel requests, the 
Panel considers that the complainants in this disput e have sufficiently identified the products at issue 
to sufficiently identify the challenged measures, cons istently with the requirements of Article 6.2 of 
the DSU.  
18. In Section II of the complainants' Panel request s, the complainants claim that China imposes 
export duties on certain products in consistently with its commitment s under Paragraph 11.3 of China's 
Accession Protocol. They indicate the measures unde r challenge and the pro ducts concerned with 
each challenged measure. In this section, the compla inants make clear that they are challenging the 
imposition of export duties by China in terms of th e legal instruments specified therein (including19 
legal instruments) and regarding the following ei ght products: bauxite, coke , fluorspar, magnesium, 
manganese, silicon metal, ye llow phosphorous, and zinc. 
19. The complainants' first written submissions as well as their responses to question No. 2 posed 
by the Panel further demonstrate the precise measur es for which the complainants are seeking rulings 
and recommendations from the Panel.  These are:  
 Customs Law16;  
 Regulations on Import and Export Duties17; and  
 2009 Tariff Implementation Program18.19  
In their first written submissions, the complainants confirmed that the products identified with these 
legal instruments are: bauxite, coke, fluorspar , magnesium, manganese, silicon metal, yellow 
phosphorous, and zinc.20  In the previously mentioned Exhibit JE-13421 the complainants also specify 
                                                      
15 For instance, the Panel asked the parties in question No. 5 to provide a table indicating for the period 
before 2009 any change over time in the level of export quotas on the products concerned in this dispute. In its 
response, China submitted as Exhibit CHN-440 a table listing the level of export quotas imposed on the relevant 
products at issue during the period 2006-2009.  Furthermore, in paras. 50 and 51of its comments on the complainants' responses to the same question, China pr ovided clarifications on information provided by the 
complainants. 
16 The 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 22 January 1987, amended 8 July 2000). 
17 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 29 October 2003, 1 
January 2004). 
18 Notice Regarding the 2009 Tariff Implementation Program (State Council Tariff Policy Commission, 
shuiweihui (2008) No. 40, 1 January 2009). 
19 The Panel notes that Section II of the complainants' Panel requests listed more than three measures; 
however, the complainants have narrowed the scope of their claims. 
20 United States' first written submission, paras. 234 and 237; Mexico's first written submission, 
paras. 237 and 240;  European Union's first written submission, paras. 130 and 148. 
21 See footnote 14 above. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-18 
  
  the precise raw materials, and the product names in s hort form, that pertain to their claims relating to 
export duties.
22 
20. As with claims on export quotas in Section I of the complainants' Panel requests, China also 
raised a number of defences with respect to the imposition of export duties. In the Panel's view, 
China's ability to offer a specific response supports the conclusion that the complainants sufficiently 
identified the scope of these claims to permit China to defend itself.  For instance, in paragraphs 84 
and 85 of its first written submission, China asserted that it does not impose export duties on bauxite.  
In paragraphs 86 to 90 of its first written submissi on, China explained that it does not impose a special 
export duty on yellow phosphorous in excess of the ad valorem  rate in Annex 6.  In Section V of its 
first written submission, China argued that export  duties applied to exports of fluorspar, coke, 
magnesium, manganese, and certain forms of zinc ar e justified pursuant to Article XX of the GATT 
1994.  Furthermore, China responded to the Panel's questions following the first substantive meeting 
and commented on the responses provided by the claimants.23  
21. Therefore, with regard to the export duties referr ed to in Section II of the Panel requests, the 
Panel considers that the complainants in this disput e have sufficiently identified the products at issue 
to sufficiently identify the challenged measures, cons istently with the requirements of Article 6.2 of 
the DSU.  
22. In Section III of the complainants' Panel request s, entitled "Additional Restraints Imposed on 
Exportation", the complainants challenge requireme nts and procedures in connection with China's 
quota bidding system; the administration of export quotas; certain requirements related to export 
licensing; the administration of an alleged mini mum export price (MEP) regime; and the alleged 
failure to publish quota amounts. The parties dis pute whether the challenge against the failure to 
publish quota amounts is properly brought against both zinc and coke.  The Panel considers each of 
these in turn. 
23. In respect of their claims concerning allocation of export quotas through a bidding system, the 
complainants identify bauxite, fluorspar, and s ilicon carbide in their Panel requests.  The 
complainants confirm these as the relevant products in their first written submissions.24 
24. In connection with their claims pertaining to the administration of export quotas, the 
complainants identify bauxite, coke, fluorspar, silic on carbide, and zinc in the introductory paragraph 
of their Panel requests. In their first written subm issions, the complainants restate their challenge 
against certain aspects relating to the direct quota allocation of zinc and coke, as well as certain 
aspects of the bidding allocation system in resp ect of bauxite, fluorspar, and silicon carbide.25   
                                                      
22 In the case of export duties, the complainants identify coke, fluorspar, magnesium, manganese, and 
zinc, as the raw materials relevant to their claims. 
23 For instance, the Panel asked the parties in Panel question No. 3 to provide a table indicating for the 
period before 2009 any change over time in the level of export duties on the products concerned in this dispute.  
In its response, China submitted as Exhibit CHN-439 a table listing the level of export duties imposed on the 
relevant products at issue during the period 2006-2009.  Furthermore, in paras. 48 and 49 of its comments on the 
complainants' responses to this question, China highlight ed discrepancies between the complainants' and China's 
information, and submitted a new table as Exhibit CHN-466 to compare the export duty level information provided by the parties. 
24 United States' first written submission, para. 315; European Union's first written submission, para. 
104; Mexico's first written submission, para. 318. 
25 United States' first written submission, paras. 292 to 303, 284 to 289; European Union's first written 
submission, paras. 238 to 245; Mexico's first written submission, paras. 295 to 306.  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-19 
  
  25. With respect to claims concerning export licen sing, the complainants identify bauxite, coke, 
fluorspar, manganese, silicon carbide, and zinc in th eir Panel requests, and confirm these products in 
their first written submissions.
26 
26. In connection with their challenge against China's alleged coordination of MEPs, the 
complainants did not identify products in their Pane l requests, stating only that "China also imposes 
quantitative restrictions on the exportation of the ma terials by requiring that prices for the materials 
meet or exceed a minimum price before they may be exported."27 However, in their first written 
submissions, the complainants' identify bauxite, coke, fluorspar, magnesium, manganese, silicon 
metal, yellow phosphorus, and zinc as releva nt to their claims in this context.28 
27. Finally, in connection with the European Union' s challenge regarding the publication of a zinc 
quota, the European Union's Panel request refers sp ecifically to a failure by China to publish a quota 
amount for the export of zinc, or to publish the conditions or procedures  relevant to making 
applications to export zinc. 
28. In the light of the above, in the Panel's view, the complainants have clarified through their 
first written submission which products relate to th eir Section III claims against China's quota bidding 
system, the administration of export quotas, certain  requirements related to export licensing, and the 
alleged coordination of MEPs.  Therefore, for these claims, the Panel considers that the complainants 
in this dispute have sufficiently identified the prod ucts at issue to sufficiently identify the challenged 
measures, consistently with the requi rements of Article 6.2 of the DSU. 
29. In sum, for the above reasons, the Panel concl udes that the complainan ts have sufficiently 
identified the products concerned by each measure in  accordance with the requirements of Article 6.2 
of the DSU.  In the Panel's view, the complainants  have clarified in their first written submissions 
which products are covered by which measures for each of their claims listed in Sections I, II and III 
of their Panel requests.  As discussed above, Chin a has responded to the complainants' claims, both 
providing arguments on the legal status of various challenged measures and asserting specific 
defences to certain of the complainants' claims.  The defences raised by  China are addressed to 
particular subsets of the concerned raw materials.   China has also presented arguments in connection 
with specific products and has discussed the operation of specific measures liste d in the complainants' 
Panel requests.  This confirms that  China has been able to understa nd which products are affected by 
each claim. 
B. WHETHER SECTION III OF THE COMPLAINANTS ' PANEL REQUESTS PROVIDE FOR A SUMMARY 
OF THE LEGAL BASIS OF THE COMPLAINT SU FFICIENT TO PRESENT THE PROBLEM CLEARLY  
30. In addition to its challenges under Article 6.2 of the DSU, discussed above and in the first 
phase of the Panel's preliminary ruling, China also challenges whether Section III of the complainants' 
Panel requests provide a summary of the legal basis of the complaint sufficient to present the problem 
clearly as required by Article 6.2 of the DSU.  In essence, China argues that th e complainants failed to 
establish sufficient connections between the me asures listed in their Panel requests and their 
                                                      
26 United States' first written submission, para. 185; European Union's first written submission, para. 
159; Mexico's first written submission, para. 188. 
27 Request for the Establishment of a Panel by the United States (WT/DS394/7); Request for the 
Establishment of a Panel by the European Communities (WT/DS395/7) and Request for the Establishment of a 
Panel by Mexico (WT/DS398/6). 
28 United States' first written submission, para. 349; European Union's first written submission, 
para. 353; Mexico's first written submission, para. 352. WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-20 
  
  assertions of violations of various WTO provisi ons.  In its Preliminary ruling request, China 
specifically challenged the complainants' assertion that all the listed measures are inconsistent with all 
of the listed WTO provisions. China submits that the complainants' subsequent written submissions 
did not rectify the situation.  China has also taken particular issue with alleged new measures 
identified in connection with Chin a's alleged coordination of MEPs. 
31. In the first phase of its preliminary ruling
29, The Panel acknowledged a potential contradiction 
between the structure of the complainants' Panel requests and their argumentation that all the listed 
measures violate all the listed WTO obligations.  However, th e Panel took note of the complainants' 
assertion that any possible concerns over the undefined scope of their challenge would be addressed in 
the complainants' first written submissions.  The Pane l therefore decided that it would only be able to 
deal with the issue of whether Section III of th e complainants' Panel requests provide sufficient 
connection between the listed measures, the list of WTO provisions claimed to be at issue, and the narrative paragraphs that precede the listed measures,  after it had reviewed the parties' first written 
submissions. 
32. The Panel received the complainants' first wr itten submissions on 1 J une 2010, after it had 
issued the first phase of its preliminary ruling.  The complainants did not directly address in their 
submissions or in their subsequent oral statements  the two matters on which the Panel had reserved its 
ruling.
30   
33. In its first written submission and at the firs t substantive meeting of the parties, China 
asserted that the complainants' first written submissi ons failed to rectify the legal deficiencies in 
Section III of the Panel requests and otherwise fa iled to seek sufficiently precise recommendations 
and rulings from the DSB with respect to the issues raised in Section III of their Panel requests.  In 
particular, for measures identified in the Panel re quests in connection with the MEP-related claims, 
China argued that the measures had expired and were  thus not properly before the Panel.  This, it 
argues, is because the complainants, failed to hold consultations on those measures, which they later 
identified, or otherwise because the particular ch allenged measures were not identified in the Panel 
requests.   
34. The Panel will first address the matter of MEP -related measures, and then address whether 
Section III of the complainants' Panel requests pr ovide for a summary of the legal basis of the 
complaint sufficient to present the problem clearly. 
2. The MEP-related measures included in the Panel's terms of reference 
35. As part of its challenge against Section III of  the complainants' Panel request, China argued 
that the complainants have intr oduced in their first written submi ssions new MEP-related measures 
that should not be considered in the Panel's terms of reference.  In paragr aph 39 of its first written 
submission, China listed 15 MEP-related measures th at the complainants referred to in their 
submissions.  According to China, only two of those measures were included in both the 
complainants' consultation and panel requests; seven  were included in the panel requests but not the 
consultation requests; two were included only in the consultation requests; and finally four of those 
measures do not appear in either the consultation or panel requests.  For Chin a, only the two measures 
that appear in both the consultations and Panel requests are properly within the Panels' terms of 
reference.  
                                                      
29 Preliminary Ruling, first phase, WT/DS394/9, WT/DS395/9, WT/DS398/8. 
30 In their joint oral statement, th e complainants only addressed the issue of whether the Panel should 
make findings on 2009 measures that may have expired or been repealed.  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-21 
  
  36. In connection with the first substantive meeting of the parties, the Panel further questioned the 
parties as to which measures should form the ba sis of the Panel's recommendations, including for 
challenges in Section III of th e complainants' Panel requests.
31  The Panel also sought from the 
complainants specific clarification on which measures comprise the complainants' MEP-related 
claims, and whether the alleged meas ures referred to by the complainan ts are listed specifically in the 
Panel requests, or otherwise c onstitute amendments, extensions, replacement measures, renewal 
measures or implementing measures, as referred to in the requests.   
37. In response to Panel's enquiry, the complainants  (in two charts, one filed jointly by the United 
States and Mexico, and a second by the European Un ion) identified a list of measures that they 
consider to be in the Panel's terms of reference.   Notably, the complainants each refer to 21 MEP-
related measures, including the 15 measures identifie d in paragraph 39 of the China's first written 
submission, as well as six additional measures that do not appear in the chart provided by China.32 
38. Of the 21 MEP-related measures discussed above , the following 15 measures are listed in 
paragraph 39 of the China's first written submission: 
 Export Price Penalties Regulations33;  
 Measures for Administration of Licensing Entities34;   
 Rules for Coordination of Customs Price Review35; 
 Rules on Price Reviews of Export Products36; 
 Provisional Rules on Export Price Verification37; 
 CCCMC PVC Rules38;  
                                                      
31 Question No. 2 posed by the Panel to the complainants. 
32 See Annex A for a full list of the short titles of these measures as referred to by the parties.  The 
Panel uses these short titles in its ruling. 
33 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), identified by China as item number 1 in  the chart presented on pa ra. 39 of its first written 
submission on 4 August 2010. 
34 Measures for the Administration of the Organs for Issuing the Licenses of Import and Export 
Commodities (Ministry of Foreign Trade and Economic Cooperation, waijingmaopeiguanhanzi (1999) No. 68, 
September 21, 1999), identified by China as item number 2 in the chart presented on para. 39 of its first written 
submission on 4 August 2010. 
35 Rules for Coordination with Respect to Custom s Price Review of Expor t Products (Ministry of 
Foreign Trade and Economic Cooperation guanzonghanzi No. 21, 1997), identified by China as item number 3 
in the chart presented on para. 39 of its  first written submission on 4 August 2010. 
36 Notice on the Rules on Price Revi ews of Export Products by the Customs (Ministry of Foreign Trade 
and Economic Cooperation guanzonghanzi No. 21, 1997), identified by China as item number 4 in the chart 
presented on para. 39 of its first written submission on 4 August 2010. 
37 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), identified by China as 
item number 5 in the chart presented on para. 39 of its first written submission on 4 August 2010. 
38 Notice Regarding Rules for Contract Declarati on for Chemicals-Related Verification and Stamp 
Products (China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters Petroleum WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-22 
  
   Online PVC Instructions
39;  
 Decision on the Reform and Improvement of the Trade System40; 
 Various Provisions on the Strengthening of  Export Product Coordination and Management41; 
 CCCMC Export Coordination Measures 42; 
 CCCMC Bauxite Branch Coordination Measures 43;  
 "system of self-discipline"44; 
 Adjustment of the Catalogue of Export Products Subject to Price Review45; 
 Notice Regarding the Trial Administration of 36 Products46; and 
 Communication47; 
                                                                                                                                                                     
and Chemicals Products Department, 30 December 2003),  identified by China as ite m number 6 in the chart 
presented on para. 39 of its first written submission on 4 August 2010. 
39 Online Verification and Certification Operating Steps (China Chamber of Commerce of Metals, 
Minerals and Chemicals Importers and Exporters), identified by China as item number 7 in the chart presented 
on para. 39 of its first written submission on 4 August 2010. 
40 Decision of the State Council on Various Questions on the Further Reform and Improvement of the 
Foreign Trade System (State Council, guofa (1990) No. 70, January 1, 1991), identified by China as item 
number 8 in the chart presented on para. 39 of its first written submission on 4 August 2010. Complainants did 
not seek recommendations for this measure in their response to question No. 2 posed by the Panel. 
41 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), identified by China as item number 9 in the char t presented on para. 39 of its first written submission 
on 4 August 2010. Complainants did not seek recommendations for this measure in their response to question 
No.  2 posed by the Panel. 
42 Identified by China as item number 10 in the ch art presented on para. 39 of its first written 
submission on 4 August 2010. 
43 Identified by China as item number 11 in the ch art presented on para. 39 of its first written 
submission on 4 August 2010. 
44 Identified by China as item number 12 in the ch art presented on para. 39 of its first written 
submission on 4 August 2010. 
45 Notice for the Adjustment of the Catalogue of Ex port 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), identified by China as item number 13 in the chart presented on para. 39 of its first written submission on 4 August  2010. Complainants did not seek recommendations for 
this measure in their response to question No. 2 posed by the Panel. 
46 Notice Regarding the Trial Administration of 36 Type s of Products such as C itric Acid (Ministry of 
Commerce and General Administration of Customs, Notice (2003) No. 36, November 29, 2003), identified by 
China as item number 14 in the chart presented on para. 39 of its first written submission on 4 August 2010. 
Complainants did not seek recommendations for this measure in their response to question No. 2 posed by the Panel. 
47 Communication (Ministry of Commerce and General Administration of Customs (2008) No. 33, 
May 26, 2008), identified by China as item number 15 in the chart presented on para. 39 of its first written 
submission on 4 August 2010. Complainants did not seek recommendations for this measure in their response to 
question No. 2 posed by the Panel.  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-23 
  
  39. In addition to these 15 measures, the complain ants identified the following six measures 
among the 21 relevant measures (as di scussed in paragraph 37 above):  
 Measures for Administration of Trade Social Organizations
48;  
 Regulations for Personnel Manageme nt of Chambers of Commerce49; 
 1994 CCCMC Charter50;  
 2001 CCCMC Charter,51; 
 Bauxite Branch Charter52; and  
 MOFTEC Circular.53  
40. In response to question No. 2 from the Panel,  the complainants requested findings and 
recommendations on the following 15 of the 21 measur es discussed above, all of which they consider 
to fall within the Panel's terms of reference: 54   
 Measures for Administration of Trade Social Organizations; 
 Regulations for Personnel Manageme nt of Chambers of Commerce; 
 1994 CCCMC Charter; 
 2001 CCCMC Charter; 
 Export Price Penalties Regulations; 
 Measures for Administration of Licensing Entities; 
                                                      
48 Measures for the Administration Over Foreign Trade and Economic Social Organizations (Ministry 
of Foreign Trade and Economic Cooperation, 26 February 1991), identified by the complainants as item "a" in 
Chart A submitted to respond to question no. 1 of the Panel on 13 September 2010. 
49 Notice Regarding Printing and Distribution of Se veral Regulations for Personnel Management of 
Chambers of Commerce for Importers and Exporters (Ministry of Foreign Trade and Economic Cooperation, 23 
September 1994), identified by the complainants as item "b" in Chart A submitted to respond to question No. 1 of the Panel on 13 September 2010. 
50 Charter of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and 
Exporters (1994), identified by the complainants as item "c" in Chart A submitted to respond to question No. 1 of the Panel on 13 September 2010. 
51 Charter of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and 
Exporters (2001), identified by the complainants as item "c" in Chart A submitted to respond to question No. 1 of the Panel on 13 September 2010. 
52 Identified by the complainants as item "d" in Chart A submitted to respond to question no. 1 of the 
Panel on 13 September 2010. 
53 MOFTEC Circular on Strengthening the Job in  the Coordination of Export Commodities (1998), 
identified by the complainants as item "e" in Chart A su bmitted to respond to question No. 1 of the Panel on 13 
September 2010. 
54 The complainants are not asking for recommendations and findings on six of the 21 measures 
referred to collectively by the parties. WT/DS394/R/Add.1 
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   Rules for Coordination of Customs Price Review; 
 Rules on Price Reviews of Export Products; and 
 Provisional Rules on Export Price Verification; 
 CCCMC PVC Rules; 
 Online PVC Instructions; 
 CCCMC Export Coordination Measures; 
 CCCMC Bauxite Branch Coordination Measures;
  
 Bauxite Branch Charter; and 
 "system of self-discipline". 
41. Of the 15 measures listed in paragraph 40 of th is ruling, the complainants submit that six 
measures appear in both the consultation and Pane l requests, and are within the Panel's terms of 
reference.  These six measures are: 
 Measures for Administration of Trade Social Organizations;  
 Regulations for Personnel Manageme nt of Chambers of Commerce; 
 1994 CCCMC Charter;  
 2001 CCCMC Charter; 
 Export Price Penalties Regulations; and  
 Measures for Administration of Licensing Entities.    
42. The complainants argue that the remaining nine measures of the 15 measures listed in 
paragraph 40 for which they seek recommendations ar e within the Panel terms of reference because 
they are "implementing" measures.55  The complainants concede that  certain of these nine measures 
appear in the complainants' consultations requests but not the Panel requests; others appear in the 
Panel requests but not the consultations requests; and finally, certain measures do not appear in either 
of the requests. 56  In their responses to Panel question No. 1, the complainants specified which are 
those nine "implementing" measures, and furthe r indicated which are the measures that they 
implement.  These are: 
 Rules for Coordination of Customs Price Review;  
                                                      
55 In their responses to question No.1 from the Panel, the complainants actually allege that there are 11 
implementing measures.  The parties have recognized th at two of these measures – the 1994 CCCMC Charter, 
and the 2001 CCCMC Charter – appear in both the consulta tions and Panel requests, and are not argued to fall 
outside the Panel's terms of reference.  See para. 35 above.   
56 See complainants' response to Panel question No. 1.  WT7DS394/R/Add.1 
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   Rules on Price Reviews of Export Products; 
 Provisional Rules on Export Price Verification;  
 CCCMC PVC Rules; 
 Online PVC Instructions; 
 CCCMC Export Coordination Measures; 
 CCCMC Bauxite Branch Coordination Measures, 
 Bauxite Branch Charter; and  
 "system of self-discipline". 
43. The complainants have not to date explained in  their responses or otherwise how any of these 
measures "implement" other measures. 
44. China responded that those measures identifie d by the complainants as "implementing" 
measures should not be in the Panel's terms of re ference.  China contended that the complainants 
failed to meet their burden to explain how any of these measures implement other measures.  For China, the set of additional measures referred to  by the complainants are not new governmental 
actions, nor have the complainants demonstrated  that these measures have the same "essence" or 
"effect" as those measures originally included in th e Panel requests. Therefore, they cannot properly 
be considered as "implementing" measures within the Panel's terms of reference.
 57 
45. The Panel considers it appropriate to address wh ether the complainants' Panel requests respect 
Article 6.2 of the DSU, both in light of China's request and with a view to confirming its competence 
to rule on the measures at issue.58  The Panel will address each of the measures discussed above. 
46. To begin, the Panel recalls the findings of the Appellate Body that a panel request must 
identify the measures with sufficient clarity to indicate  the nature of the measure and the gist of what 
is at issue.59 The Appellate Body has indicated that the ob ligation to afford due process is "inherent in 
the WTO dispute settlement system"60 and is "fundamental to ensuring a fair and orderly conduct of 
dispute settlement proceedings".61  It concluded that: 
"[T]he protection of due process is an essen tial feature of a rules-based system of 
adjudication, such as that established under the DSU. Due process protection 
                                                      
57 China's response to Panel question No. 1; China's comments on complainants' responses to Panel 
question No. 1.  The complainants request the Panel not to  consider these new arguments raised by China in its 
Panel's preliminary ruling because these issues were not raised by China at the outset of its preliminary ruling 
request and were not addressed by the parties in the context of their preliminary ruling request. 
58 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US) , para. 36. 
59 Preliminary Ruling, first phase, para. 8,  referring to Appellate Body Report on US – Continued 
Zeroing , paras. 168-169. 
60 Appellate Body Report on Chile – Price Band System , para. 176. See also Appellate Body Report on 
Mexico – Corn Syrup (Article 21.5 – US) , para. 107 . 
61 Appellate Body Report on Thailand – H-Beams , para. 88. WT/DS394/R/Add.1 
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  guarantees that the proceedings are conducted with fairness and impartiality, and that 
one party is not unfairly disadvantaged with respect to other parties in a dispute."
62 
This includes requiring that the respondent be afford ed an adequate opportunity to respond to claims, 
arguments, or evidence presented by the complainants.63  
47. In the first phase of its preliminary ruling, the Panel recognized that its terms of reference are 
generally limited to measures that have been identifie d in the complainants' Panel requests.  The Panel 
also recognized, however, that there may be situa tions where a new governmental measure or action 
that may not have existed at the time of the Panel request may nevertheless be so closely linked to the 
challenged measures that it falls within the Panel's te rms of reference.  Such measure could potentially 
include an amendment or extension, related me asure, replacement measure, renewal measure, or 
implementing measure.64  Such measure, however, must not change the "essence" of the initial 
measure that was properly identified in the Panel request.65  The Panel also recalls that it has ruled 
that the scope of the Panel's terms of referenc e in this dispute would not extend to broad and 
undefined "related measures".66  
48. In the Panel's view, those six measures that appear in both the c onsultations and Panel 
requests are clearly within the Panel's terms of re ference.  To recall from paragraph 40 above, these 
are:  
 Measures for Administration of Trade Social Organizations;  
 Regulations for Personnel Management  of Chambers of Commerce;  
 1994 CCCMC Charter; 
 2001 CCCMC Charter; 
 Export Price Penalties Regulations; and  
 Measures for Administration of Licensing Entities.   
49. However, the complainants have not demonstr ated that the nine remaining MEP-related 
"implementing" measures (see paragraph 42 above) for which they seek recommendations implement 
other measures identified in th e complainants' Panel requests.67  Of these 9 implementing measures, 
the complainants indicated that five of them app ear in the Panel requests but not the consultations 
requests.  These are: 
                                                      
62 Appellate Body Report on US – Continued Suspension , para. 433. 
63 Appellate Body Report on US – Continued Suspension , para. 433; Appellate Body Report on US – 
Gambling , paras. 269-273; Appellate Body Report on Canada – Wheat Exports and Grain Imports , para. 177; 
Appellate Body Report on Mexico – Corn Syrup  (Article 21.5 – US), para. 47; Appellate Body Report on 
Australia – Salmon , paras. 272 and 278; and Appellate Body Report on Brazil – Desiccated Coconut , p. 22. 
64 Preliminary Ruling, first phase, para. 16. The Panel noted in that phase of its ruling that the term 
"implementing measures" refers to actions taken by China to implement existing challenged measures. 
65 Preliminary Ruling, first phase, para. 16 , referring to Appellate Body Report on Chile – Price Band 
System , para. 139, and Appellate Body Report on US – Upland Cotton (Article 21.5 – Brazil) , para. 270. 
66 Preliminary Ruling, first phase, paras. 17 and 18. 
67 These include measures that were identified in bo th the Panel and consultations requests as well as 
measures that only appear in the Panel requests.  Thes e do not include measures th at appear solely in the 
consultations requests.  WT7DS394/R/Add.1 
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   Rules for Coordination of Customs Price Review; 
 Rules on Price Reviews of Export Products; 
 Provisional Rules on Export Price Verification; 
 CCCMC PVC Rules; and  
 Online PVC Instructions. 
50. The complainants further indicated that the re maining four alleged "implementing" measures 
do not appear in the consultations or Panel requests.  These are: 
 CCCMC Export Coordination Measures; 
 CCCMC Bauxite Branch Coordination Measures; 
 Bauxite Branch Charter; and  
 "system of self-discipline". 
51. For those measures listed in paragraph 49 that are alleged to be "implementing" measures and 
that were in Panel requests, the complainants did not  seek to explain the "essence" of these measures 
or their link to any measures included in the consultation requests.
68  The complainants merely assert 
in response to question No. 1 from the Panel that all nine measures are implementing measures. The complainants did not explain why the measures li sted in paragraph 50 above were not in their 
consultation or Panel requests, nor how they  can be considered implementing measures. 
52.  The complainants' late reference to these nine MEP-related measures (that either appear in 
the Panel request but not the consultations request, or that do not appear in the consultations or Panel 
requests) and their failure to argue or demonstrat e that these measures either maintain the essence of 
the measures they are alleged to implement leads the Pa nel to find that the complainants have failed to 
comply with the requirements of Article 6.2 of the DSU, with respect to these nine measures.
69  As a 
result of this delayed identification of these nine measures, China was not given appropriate notice of 
all aspects of the claims against it.  It did not kn ow the case it had to meet and thus was not afforded 
opportunity to respond.  Even if the complainants  were eventually to ad dress how such measures 
"implement" the original measures, this would not cure  a failure to meet the obligations of Article 6.2 
of the DSU.  The time for proper notice has passed.  Later explanation would on ly afford China a late 
and limited opportunity to respond. China signalled ear ly on the complainants' failure to properly 
                                                      
68 Panels and the Appellate Body have addressed requirements for including measures in a panel's 
terms of reference that were not incl uded in a consultations request. Requ irements include addressing whether a 
measure has the "same essence" and "effect" as a measure in the consultations request. See Panel Report, 
Dominican Republic– Import and Sale of Cigarettes,  para. 7.21; Appellate Body Report on US – Certain EC 
Products, paras. 74- 77. See also Appellate Body Report on US- Continued Zeroing,  para. 230; Panel Report on 
US – Continued Zeroing,  paras. 7.26 and 7.27.   
69 The Panel recalls its statement from the first phas e of its preliminary ruling that measures to be 
included in the Panel's terms of reference should generally exist at the time of the filing of the panel request, 
except in cases where new governmental actions were considered to be so closely linked to the challenged 
measures that they may be also considered to fall within  the Panel's terms of reference.  The Panel also recalled 
that such measures must not change the "essen ce" of the measures originally challenged.  See Panel ruling, first 
phase, para. 16; referring to Appellate Body Report on Chile – Price Band System , para. 139. WT/DS394/R/Add.1 
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  identify these measures.  Nevertheless, no explanat ion was provided by the complainants as to why 
these new measures were not included in the requests.  All that the Pa nel has before it is a chart with 
the descriptor "implementing" for these nine measures. 
53. The Panel notes specially the complainants' failu re to explain how the alleged implementing 
measures implement measures – some of which Ch ina claims are expired measures. Implementing 
measures normally would not derive authority from measures whose legal authority has expired. The 
complainants have not indicated that any of the additional alleged "implementing" measures are new 
or were put in place after the Panel requests were submitted.  In the interests of due process and good 
faith, it was incumbent upon the complainants to provide explanations about the measures they 
consider fall within the Panel's terms of reference.   
54. In the Panel's view, the complainants woul d have had to provide more arguments and 
evidence in their opening written and oral submission s, or in responses to the Panel's questions, to 
have met the obligations of Article 6.2 of the DSU. Although more argument ation might have been 
possible in later submissions, additional evidence s upporting material on the issue of the Panel's terms 
of reference with respect to implementing measur es would have been too late at the rebuttal phase.
70   
55. The Panel does not have enough evidence at th is stage to persuade it that the measures 
could operate to implement the measures menti oned in the requests, and it cannot permit the 
complainants to submit new evidence at this stage.  Nor can it s eek to make the complainants case for 
them through posing more questions.  Neither the respondent nor the Panel should on their own have 
to determine what specific MEP-related measures are under challenge, and therefore what measures 
define the terms of reference. 
56. In reaching this conclusion, the Panel does not  mean to imply that a panel request must 
always include extensive detail about alleged im plementing measures.  The Appellate Body has 
previously explained that adequate notice to a res pondent is not determined by examining one part of 
the panel request in isolation, but rather by consid ering the request as a whole, and in the light of 
attendant circumstances.71  Moreover, the Appellate Body has ex plained that the different claims in 
the request for establishment must be read in their context.72   
57. For the reasons above, the Panel rules that the following six measures are within its terms of 
reference: 
 Measures for Administration of Trade Social Organizations;  
 Regulations for Personnel Management  of Chambers of Commerce;  
 1994 CCCMC Charter; 
 2001 CCCMC Charter; 
 Export Price Penalties Regulations; and  
 Measures for Administration of Licensing Entities.   
                                                      
70 Appellate Body Report on Argentina – Textiles , para. 79 
71 Appellate Body Report on US – Carbon Steel, para. 127. 
72 Panel Report on Mexico – Anti-dumping Measures on Rice , para. 7.31 ( original footnote omitted ).  WT7DS394/R/Add.1 
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  The Panel considers that only these above MEP-relate d measures fall within its terms of reference and 
hence, it will only address these measu res in this ongoing dispute. 
58. The Panel is aware that China has raised furthe r objections with respect to the complainants' 
MEP-related claims.  The Panel will address these add itional matters in its Panel report.  Having ruled 
on the specific measures relevant to the complainan ts' claims of MEP-relate d claims, the Panel will 
now address whether Section III of the complainan ts' Panel requests fail to present the problem 
clearly by failing to provide sufficient connections  between the listed measures and the listed claims 
of violations.  
3. Whether Section III of the complainants' Panel requests fail to present the problem 
clearly by failing to provide sufficient conn ections between the listed measures and the 
listed claims of violations 
59. Having addressed specific questions pertaining to the relevant measures at issue for the 
complainants MEP-related  claims, the Panel will next address China's broader assertion that Section 
III of the complainants' Panel requests fail to present the problem clearly in accordance with 
paragraph 6.2 of the DSU. 
60. For China, Section III does not provide a clea r connection between the listed measures, the 
list of provisions claimed to be violated, and th e narrative paragraphs that describe generally how 
"some" of the listed measures are incons istent with "some" WTO disciplines. 
61. In response to a question No. 2 from the Panel, the parties identified those measures for which 
the Panel should provide recommendations in its final report.
73  As explained above,74 the 
complainants (in two charts, one filed jointly by the United States and Mexico, and a second by the 
European Union) listed those measures that they cons ider relevant for all of their claims made in 
connection with Sections I, II a nd III of their Panel requests.   
62. China asserts that the variation between the ta ble presented by the United States and that by 
the European Union underscores that  the complainants have not suffic iently identified which subset of 
claims is made under which subset of the 13 treaty pr ovisions, with respect to which subset of the 37 
measures that appear in Section III of the Panel reque sts.  China argues that the complainants describe 
the subject matter of their claims differently, in cluding what China alleges are different issues 
regarding the administration of export quotas and allocation conditions, and q uota bid-winning fees.   
63. The Panel recalls its view that the matter of  whether the mere listing of provisions of a 
particular WTO agreement is sufficient to comply with the requirement to provide a summary of the 
legal basis of the complaint must be determined on a case-by-case basis.75 
64. The Panel observes that Section III, in va rious respects, includes claims against:  
(a) China's administration of its quota system;  
(b) China's export licensing system;  
                                                      
73 Question No. 2 posed by the Panel to the complainants. 
74 See para. 37. 
75 Preliminary Ruling, first phase, para. 33, referring to Appellate Body Report on Korea – Dairy , 
para. 127. WT/DS394/R/Add.1 
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  (c) China's coordination of MEPs and fa ilure to publish such prices; and  
(d) China's failure to publish certain quota amounts. 
65. For the reasons set forth below, the Panel c onsiders that the complainants' first written 
submission set out sufficient connections between the challenged measures and certain violations 
attributed to such measures. The Panel would note, pr eliminarily, its view that differences in the scope 
of the claims (including in the narrative paragraphs ) as presented by the United States, Mexico and the 
European Union do not necessarily affect the proper identification of measures by each of the complainants. 
66. The Panel agrees with China that, contrary to their assertions, the complainants did not 
advance all claims, under all treaty provisions, with respect to all measures.  Indeed, the complainants 
clarified the connection of the measures at hand with  the specific claims in their responses to question 
No. 2 posed by the Panel. This may be illustrated  through various examples referred to below.  
67. First, with regard to the administration of China's export quota system, the United States and 
Mexico identified the instrument entitled "Regul ation of the People's Republic of China on the 
Administration of  Import and Export of Goods" as one of the legal instruments related to the 
administration of the export quota system. The United States and Mexico identified the inconsistency of this measure with Article X:3 (a) of the GATT 1994. 
68. Second, with regard to the export licensing syst em, the complainants identified the instrument 
entitled "Export License Measures"
76 as one of the legal instruments related to the imposition of the 
administration of China's quota system.  The United States and Mexico claimed the inconsistency of 
the measure with Article XI:1 of the GATT 1994,77 while the European Union claimed that the 
measure is inconsistent with Article XI:1 of  the GATT 1994, paragraph 1.2 of China's Accession 
Protocol, and paragraphs 83 and 84, and 162 and 165 of the Working Party Report. 
69. Third, with regard to the MEP-related claims , the complainants identified the instrument 
entitled "Measures for Administration of Trade Social Organization"78 as one of the related legal 
instruments. The complainants contended that th is measure and others are inconsistent with 
Article XI:1 as well as Article X:1 and X:3 of the GATT 1994. 
70. The Panel also considers that the fact China raised specific defences against a number of 
claims under Section III of the Panel requests supports its view that the complainants have met their 
burden to present the problem clearly . For instance, in Section VII of its first written submission, 
China reserved arguments about the consistency of its administration of its quota system with its 
obligations under the WTO.  China asserted in Secti on VIII(B) of its first written submission that the 
administration of its export licensing system is consistent with Article XI:1 of the GATT 1994. 
Finally, in connection with certain MEP-rela ted measures, China submitted that it no longer 
coordinates minimum export prices.  In addition, Ch ina takes this stance in connection with assertions 
                                                      
76 Measures for the Administration of License for the Export of Goods (Order of the Ministry of 
Commerce (2008) No. 11, July 1, 2008). 
77 Although the United States and Mexico in their first written submissions, alleged that China's export 
licensing is inconsistent with paragraph 1.2 of China's Accession Protocol and paragraphs 162 and 165 of China's working party report, the United States and Mexico did not request the Panel to make recommendations 
on these claims in their responses to Panel question No. 2.  The Panel is therefor e unclear whether the United 
States and Mexico intend to proceed with these additional claims of violation. 
78  "Measures for the Administration over Foreign Trade and Economic Social Organization "(Ministry 
of Foreign Trade and Economic Cooperation, 26 February  1991).  WT7DS394/R/Add.1 
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  that China failed to publish measures pertaining to such coordination, or that it administers such 
coordination in a manner that is not  impartial, reasonable and uniform. 
71. Finally, the Panel will address claims by the European Union that China failed to publish 
certain quota amounts.  As with its other claims on Section III of the Panel requests, China asserted 
generally that the European Union did not provide sufficient connections between the listed measures 
and these claims.  In addition, China argued that  the European Union may only proceed with its 
publication claims concerning the zinc quota, and not the coke quota, due to a failure to give notice of a claim against the coke quota in its Panel requ est.  In the latter respect, China argues that, in 
paragraph 4 of Section III of its Panel request, th e European Union states only 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" (emphasis added)."  It notes no mention of a quota on "coke". 
72. The European Union responded that it properly set forth both claims against zinc and coke in 
its Panel request. Specifically, the European Union re fers to the first paragraph of Section III of its 
Panel Request which reads "China ... does not publish certain measures pertaining to the 
requirements, restrictions or prohi bitions on exports".  The European  Union claims that this language 
demonstrates that the European Union raised a claim of non-publication of measures and that the 
specific mention of zinc in the fourth paragra ph of the Panel Request was for illustrative purposes 
only.
79 
73. The Panel observes that under Article 6.2 of the DSU, a complainant must "identify the 
specific measures at issue".  The Panel explained above th at there is no general requirement in Article 
6.2 of the DSU to identify the products at issue in  a complainants' Panel request, and that different 
claims in the request for establishm ent must be read in their context.80   
74. Given the specific language of the European Uni on's Panel request, the Pa nel is of the view 
that the European Union has brought its publicatio n claims concerning quotas only with respect to 
zinc, and not coke.  The Panel finds nothing in the narrative description or elsewhere in Section III to 
support the assertion that the reference to zinc in paragraph 4 of that section was for illustrative 
purposes only.  Indeed, the language in its request s uggests the contrary.  For instance, the European 
Union did not incorporate phrases like "such as", "for example", or " inter alia ".  Moreover, each of 
the other narrative paragraphs in Section III of the European Union's Panel request (with the 
exception of paragraph 4) contain a precise list of produc ts subject  to other claims of violation. This 
implies that paragraph 4 was in the same vein and should not be read differently. 
75. The inclusion of the reference to the zinc quota in the Panel request is an indication to the 
Panel that the European Union was aware of,  as well as capable of identifying the measures which 
had not been published.  The European Union coul d have been clearer, and instead it left China 
unsure as to the nature of the case against it.  Th e European Union could have referenced the coke 
quota in the relevant paragraph of Section III of its Panel request, thereby ensuring that it fell within 
the Panel's terms of reference.  Considering the om ission of the coke quota from the 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.81 
                                                      
79 European Union's opening oral statement, para. 24. 
80 Panel Report on Mexico – Anti-Dumping Measures on Rice , para. 7.31 ( original footnote omitted ). 
81 The panel on China – Audiovisual Services  referred to the general legal canon of construction 
expressio unius est exclusio alterius  in assessing the decision by the co mplainant to exclude a particular 
provision from the text of its panel request.  That panel noted that the canon of construction holds that to express WT/DS394/R/Add.1 
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  76. In light of the particular approach taken by the European Union, whereby it referred 
specifically to the zinc quota and listed precise produc ts in other paragraphs the Panel concludes that 
the European Union failed to identify China's alle ged omission to publish the coke quota as a specific 
measure at issue in its Panel request, in accordance with the requirements set out in Article 6.2 of the 
DSU.  The Panel therefore considers that the publi cation claim concerning the zinc quota is within its 
terms of reference; but that re lated to the coke quota is not. 
77. For the foregoing reasons, the Panel considers th at the complainants have provided sufficient 
connections between the listed claims and violations in Section III for certain of their claims, but not 
others.  Specifically, the Panel rules that the complainants have made connections between the 
measures and claims sufficient to meet the requireme nts of Article 6.2 of the DSU for the following: 
in respect of (i) claims concerning China's administ ration of its quota system; (ii) claims concerning 
China's export licensing system; (iii) China's coordi nation of MEPs and the failure to publish such 
prices; and (iv) China's alleged failure to publish quota amounts for zinc.  For these claims, the Panel 
considers that China has not been prejudiced in its ability to defend itself.  Accordingly, the Panel will 
consider those listed measures and related claims with in its terms of reference.  However, the Panel 
agrees with China that that the European Communities has not set forth a publication claim 
concerning quota amounts of coke for the reasons provided above.  Acco rdingly, the Panel finds this 
allegation to fall outside its terms of reference. 
C. C
ONCLUSIONS  
78. The Panel recalls its earlier decision to issue its preliminary ruling in tw o stages.  In issuing 
this second phase of its ruling, the Panel hereby completes its preliminary ruling.  The Panel 
determines in this ruling through its assessment of the complainants' first written submissions and oral 
statements, and responses to questions posed by the Panel, that Sections I, II and III of the Panel 
requests sufficiently identify the products con cerned by the challenged measures.  In addition, 
although the complainants' panel Requests could have been clearer, for the most part, the 
complainants' Panel requests, as clarified by thei r first submissions, provide sufficient connection 
between the measures listed in Section III and the liste d claims of violations, with the exception of the 
European Union's publication claim concerning coke quot as.  The Panel also determined that its terms 
of reference with respect to claims relating to China's alleged coordination of MEPs are limited to 
assessing the WTO compatibility of the following measures: 
 Measures for the Administration Over Forei gn Trade and Economic Social Organizations 
(Ministry of Foreign Trade and Econo mic Cooperation, 26 February 1991);82 
 Notice Regarding Printing and Distributio n of Several Regula tions for Personnel 
Management of Chambers of Commerce for Im porters and Exporters (Ministry of Foreign 
Trade and Economic Cooperation, 23 September 1994);83   
                                                                                                                                                                     
or include one thing implies the exclusion of the other or of the alternative (see Panel Report on China – 
Audiovisual Services , para. 7.60, referring to Black's Law Dictionary,  8th ed., B.A. Garner (ed) (West Group 
2004), p. 620); also Ian Brownlie, Principles of Public International Law, 6th  ed. (2003) p. 602, 604.  The Panel 
finds this principle relevant to its assessment of the Eu ropean Union's failure to reference the coke quota in its 
Panel request in this dispute. 
82 Identified by the complainants as item "a" in Chart A submitted in response to Panel question No. 1.  
In this ruling, this measure is referred to as "Measur es for Administration of Trade Social Organizations". 
83 Identified by the complainants as item "b" in Chart A submitted in response to Panel question No. 1.  
In this ruling, this measure is referred to as "Regulations for Personnel Management of Chambers of 
Commerce".  WT7DS394/R/Add.1 
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   Charter of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers 
and Exporters (1994);
84   
 Charter of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers 
and Exporters (2001);85 
 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 20 March 1996);
86 and  
 Measures for the Administration of the Organs for Issuing the Licenses of Import and Export 
Commodities (Ministry of Foreign Trade and Economic Cooperation, 
waijingmaopeiguanhanzi (1999) No . 68, September 21, 1999).87 
The Panel will therefore limit its assessment to wh ether these six measures violate either Article X:1 
or X:3(a), or Article XI:1 of the GATT 1994. 
79. The Panel is aware that China has raised further objections with respect to the Panel's terms of 
reference.  The Panel notes that its preliminary ru ling does not exhaust all matters raised by China 
with respect to the Panel's terms of reference.  In particular, the Panel has not dealt with the claim of 
China that certain of the challenged measures ha ve now expired.  The Panel will address these 
additional claims in its Panel report.  
80. The Panel reserves its decision to develop its reasoning regarding each aspect of its 
preliminary ruling in a subsequent ruling or in its final report.   
_______________ 
                                                      
84 Charter of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and 
Exporters (1994), identified by the complainants as item "c" in Chart A submitted in response to Panel question 
No. 1.  In this ruling, this measure is referred to as "1994 CCCMC Charter". 
85 Charter of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and 
Exporters (2001), identified by the complainants as item "c" in Chart A submitted in response to Panel question 
No. 1.  In this ruling, this measure is referred to as "2001 CCCMC Charter". 
86 Identified by China as item number 1 in the chart pr esented on para. 39 of its first written submission 
on 4 August 2010.  In this ruling, this measure is referred to as "Export Pr ice Penalties Regulations". 
87 Identified by China as item number 2 in the chart pr esented on para. 39 of its first written submission 
on 4 August 2010.  In this ruling, this measure is re ferred to as "Measures for Administration of Licensing 
Entities". WT/DS394/R/Add.1 
WT/DS395/R/Add.1 WT/DS398/R/Add.1 
Page F-34 
  
  Annex A 
 
Table of legal instruments referred to in this ruling 
  
Short Titles Complete Names 
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 22 January 1987, amended 8 July 2000) 
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 26
th executive 
meeting of the State Council on 29 October 2003, 1 January 2004) 
2009 Tariff Implementation Program Notice Regarding the 2009 Tariff Implementation Program (State Council 
Tariff Policy Commission, shuiweihui (2008) No. 40, 1 January 2009) 
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) 
Measures for Administration of Licensing Entities Measures for the Administration of the Organs for Issuing the Licenses of 
Import and Export Commodities (Ministry of Foreign Trade and Economic Cooperation, waijingmaopeiguanhanzi (1999) No. 68, September 21, 1999) 
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) 
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 Economic Cooperation guanzonghanzi No. 
21, 1997) 
Provisional Rules on Export 
Price Verification Provisional Rules on Export Price Verification and Chop for Key Products 
Subject to Price Review (Ministr y of Foreign Trade and Economic 
Cooperation guanzonghanzi No. 21, 1997) 
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 a nd Exporters Petroleum and Chemicals 
Products Department, 30 December 2003) 
Online PVC Instructions Online Verification and Certification Operating Steps (China Chamber of 
Commerce of Metals, Minerals and Chemicals Importers and Exporters) 
Decision on the Reform and Improvement of the 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) 
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) 
CCCMC Export Coordination Measures CCCMC Export Coordination Measures  WT7DS394/R/Add.1 
 WT/DS395/R/Add.1 
 WT/DS398/R/Add.1 
 Page F-35 
  
  Short Titles Complete Names 
CCCMC Bauxite Branch 
Coordination Measures CCCMC Bauxite Branch Coordination Measures 
"system of self-discipline" "system of self-discipline" 
Adjustment of the Catalogue 
of Export Products Subject to Price Review 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) 
Notice Regarding the Trial Administration of 36 Products Notice Regarding the Trial Administration of 36 Types of Products such as 
Citric Acid (Ministry of Commerce and General Administration of Customs, Notice (2003) No. 36, November 29, 2003) 
Communication Communication (Ministry of Commerce and General Administration of 
Customs (2008) No. 33, May 26, 2008) 
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, 26 
February 1991) 
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, 
23 September 1994) 
1994 CCCMC Charter Charter of the China Chamber of Commerce of Metals, Minerals and 
Chemicals Importers and Exporters (1994) 
2001 CCCMC Charter Charter of the China Chamber of Commerce of Metals, Minerals and 
Chemicals Importers and Exporters (2001) 
Bauxite Branch Charter Bauxite Branch Charter 
MOFTEC Circular. MOFTEC Circular on Strengthening the Job in the Coordination of Export 
Commodities (1998) 
 
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