WORLD TRADE  
ORGANIZATION   
G/MA/W/106 
19 September 2011 
 (11-4514) 
Committee on Market Access Original:   English 
  
 
CHINA'S TRANSITIONAL REVIEW MECHANISM 
 
Questions and Comments of Japan on the Implementation by China  
of its Commitments on Market Access 
 
Communication from Japan 
 
 
 The following communication, dated 16 September 2011, is being circulated at the request of the Delegation of Japan. 
 
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Japan appreciates China's efforts to  answer some of the questions posed by members. However, 
China has not fully answered questions regarding expor t restrictions.  It would thus be appreciated if 
China could clarify the following points:  
 
1. Export Restrictions and Export  Taxes on Non-Ferrous Metals 
(a) The Chinese Government has issued export rest rictions on several raw material products, 
including rare earths, tungsten, antimony, indium, molybdenum, tin, coke, etc. 
(b) As for rare earths, China's Ministry of Comme rce published that the total amount of export 
quotas is set at approximately 8,000t in 2010, marking a 40 per cent decrease compared to 
2009.  The total amount for the year 2011 is expected to be approximately the same as 2010. However, the ferroalloys were recently include d in the export quotas; as a result, the amount 
of quotas has also decreased significantly.  
(c) China explained that these measures were take n to protect exhaustible natural resources. 
However, the amount of production and consumpti on of these products in China is increasing.  
Some point out that these measures benefit domestic users of the metals. 
(d) China also imposes export duties on various raw ma terials, including rare earths, tungsten, 
antimony, indium, molybdenum, tin, fluorite, and hydrogen fluoride (hydrofluoric acid). The export duties have been raised sev eral times since November 2006. 
(e) Please explain how China justifies its export restrictions on these metals under the GATT.  
Please describe China's plans to eliminate export restrictions. G/MA/W/106 
Page 2  
 
  2. Export Restrictions and Export Taxes on Coal 
(a) Japan understands that China has been impl ementing export licensing on coal.  Whereas a 
sufficient number of export licenses used to be issued in terms of China's export amount of 
coal, the number of issuance has decreased over the past few years.  Japan is therefore 
concerned that this trend might hamper smooth trade flow of coal.  Since China's domestic 
production and consumption of coal  seem to be in expansion,  it is unclear if the export 
licensing measures on coal has been adopted in conjunction with the restrictions on domestic production and/or consumption, as stipulated in GATT Article XX (g ).  Japan is thus 
concerned that such measures are not consistent with the GATT Article XI.  Please explain how China justifies the export licensing on coal under the GATT. 
(b) In addition, Japan understands that, while Chin a is committed to eliminating export taxes for 
items - with the exception of those which are listed on Annex 6 in China's Protocol to the 
Accession - China has raised export taxes on coking  coal and has levied taxes on steam coal 
and anthracite since August 2011.   Please expl ain how China justifies its export taxes under 
its commitment upon accession. 
(c) Please describe any plans to review the export licensing measures and imposition of export 
taxes on coal. 
3. Export prohibition on Natural Sand 
(a) In March 2006, China's Ministry of Commerc e announced the export prohibition rule on 
natural sand.  On 5 January 2007, China anno unced that the rule will take effect from 
March 2007. 
(b) China explains that the purpose of the prohibiti on is to conserve natural resources, and that 
the production and consumption of natural sand are also restricted in parallel with the export 
prohibition.  Yet Japan thinks that China needs to explain its restrictive measures in detail, 
including legislative measures and quantita tive restrictions on domestic production and 
consumption of natural sand. 
(c) The Japanese industry sector submitted several i nquiries regarding details of the measures as 
well as requests for the repeal of such measures.   They are deeply concerned about China's 
export prohibition measures. 
(d) To this date and previously, on several occasions such as during TRMs and Japan-China 
Ministry of Commerce regular consultative m eetings, Japan has posed questions over the 
consistency with WTO rules of China’s export prohibition on natural sand.  Notwithstanding 
these, there have been no suffici ent explanations from China. 
4. Export Taxes on Chemical Fertilizers and their Raw Materials 
(a) China has levied export taxes on fertilizers and their raw materials since 2008 (110 per cent 
maximum including special export tax in 2011). The following is a summary of China's 
export taxes:  
- China levied a 100 per cent special export ta x on 32 items of chemical fertilizers and 
their raw materials from 20 April to 30 September 2008.  
 
- Moreover, a total of 6 items, including phos phate rock, were added to the list of the 
above items, making them subject to the 100 per cent special export tax on May 2008.   G/MA/W/106 
 Page 3 
 
 
  - Since then, China has levied various rat es of special export taxes on several items. 
 - Currently, a total of 8 items have been levied. For instance, during periods of high 
demand, China has levied a 75 per cent sp ecial export tax on items such as urea and 
ammonium phosphate, in addition to a 35 per cent export tax levied during such 
periods (i.e., from January to June and fro m November to December for urea; from 
January to May and from October to December for ammonium phosphate).  
 (b) As these products are not listed in Annex 6 of  the protocol, the Government of Japan is 
concerned that the aforementioned measures are inconsistent with the commitment to abolish 
export taxes in accordance with Section 3, Ar ticle 11 of China's WTO accession protocol, 
(c) The Government of Japan has made several inquiries regarding China's future plans to 
eliminate these export taxes on the aforementi oned items in TRM and TPR.  However, the 
Government of Japan has not received any conc rete explanation from China.  Please explain 
China's plans to eliminate the export taxes on these items. 
 
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