CHINA – MEASURES RELATED TO THE EXPORTATION OF VARIOUS RAW MATERIALS
Document: Appellate Body Report
Date: 30 January 2012
Document codes: WT/DS394/AB/R; WT/DS395/AB/R; WT/DS398/AB/R; WT/DS394/AB/R; WT/DS395/AB/R; WT/DS398/AB/R.; WT/DS394/AB/R; WT/DS395/AB/R; WT/DS398/AB/R
Complainant: Mexico
Respondent: China
Third parties: Argentina, Brazil, Canada, Chile, Colombia, Ecuador, EU, India, Japan, South Korea, Norway, Taiwan, Turkey, Saudi Arabia, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. VIII:1, VIII:4, X:1, X:3, XI:1  GATT 1994Part I, para. 1.2, Part I, para. 5.1, Part I, para. 5.2, , Part I, para. 8.2  Protocol of Accession

CHINA – MEASURES RELATED TO THE EXPORTATION
OF VARIOUS RAW MATERIALS

AB-2011-5

Reports of the Appellate Body

Note:

The Appellate Body is issuing these Reports in the form of a single document constituting three separate
Appellate Body Reports: ; ; and The cover page,
preliminary pages, Sections I through VIII and the Annexes are common to all three Reports. The page header
throughout the document bears three document symbols, , , and
, with the following exceptions: Sec tion IX on pages US-145 and US-146, which bears the
document symbol for and contains the Appellate Body's findings and conclusions in the Appellate Body Report
; Section IX on pages EU-145 and EU-146, which bears the document symbol for and
contains the Appellate Body's findings and conclusions in the Appellate Body Report ; and
Section IX on pages MEX-145 and MEX-146, which bears the document symbol for and contains the
Appellate Body's findings and conclusions in the Appellate Body Report

W
ORLD TRADE ORGANIZATION
APPELLATE BODY

China, Appellant, Appellee
United States, Other Appellant, Appellee
European Union
1, Other Appellant, Appellee
Mexico, Other Appellant, Appellee

Argentina, Third Participant
Brazil, Third Participant
Canada, Third Participant
Chile, Third Participant
Colombia, Third Participant
Ecuador, Third Participant
India, Third Participant
Japan, Third Participant
Korea, Third Participant
Norway, Third Participant
Saudi Arabia, Third Participant
Separate Customs Territory of Taiwan, Penghu,
 Kinmen and Matsu, Third Participant
Turkey, Third Participant

 AB-2011-5

 Present:

 Ramírez-Hernández, Presiding Member
 Hillman, Member
 Oshima, Member

I. Introduction
1. China and the United States each appeals certain issues of law and legal interpretations
developed in the Panel Report, , Complaint by the United States (WT/DS394/R) (the "US Panel Report"); China and the

1This dispute began before the entry into force of the Treaty of Lisbon amending the Treaty on
European Union and the Treaty establishing the European Community (done at Lisbon, 13 December 2007) on
1 December 2009. On 29 November 2009, the World Trade Organization (the "WTO") received a Verbal Note
(WT/L/779) from the Council of the European Union and the Commission of the European Communities stating
that, by virtue of the Treaty of Lisbon, as of 1 December 2009, the "Europ ean Union" replaces and succeeds the
"European Community". On 13 July 2010, the WTO re ceived a second Verbal Note (WT/Let/679) from the
Council of the European Union conf irming that, with effect from 1 December 2009, the European Union
replaced the European Community and assumed all the rights and obligations of the European Community in
respect of all Agreements for which the Director-General of the World Trade Organization is the depositary and
to which the European Community is a signatory or a c ontracting party. We understand the reference in the
Verbal Notes to the "European Community" to be a reference to the "European Communities". Thus, although
the European Communities was a party in the Panel proceedings, it is the European Union that filed a Notice of
Appeal in this dispute after the entry into force of the Treaty of Lisbon , and we will thus refer to the
European Union in this Report in its capacity as appellee and other appellant.

European Union each appeals certain issues of law and legal interpretations developed in the Panel
Report, , Complaint by the
European Union (WT/DS395/R) (the "EU Panel Report"); and China and Mexico each appeals
certain issues of law and legal interpre tations developed in the Panel Report, , Complaint by Mexico (WT/DS398/R) (the
"Mexico Panel Report") (collectively, the "Panel Reports").
2 The Panel was established to consider
complaints by the United States 3, the European Union 4, and Mexico 5 (the "complainants") regarding
the consistency of certain measures imposed by Ch ina on the exportation of certain forms of bauxite,
coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorous, and zinc6
(the "raw materials") with the General Agreement on Tariffs and Trade 1994 (the "GATT 1994"), the
Protocol on the Accession of the People's Republic of China 7 ("China's Accession Protocol"), and the
Report of the Working Party on the Accession of China8 ("China's Accession Working Party Report").
2. Before the Panel, the complainants challenged four types of restraints imposed by China on
the exportation of the raw materials: (i) export duti es; (ii) export quotas; (iii) export licensing; and
(iv) minimum export price requirements. 9 The complainants also challenged certain aspects of
China's allocation and administration of export quotas, export licences, and minimum export prices, as
well as the alleged non-publica tion of certain export measures.
10 The complainants alleged that these
export restraints were inconsistent with Chin a's commitments under China's Accession Protocol and
China's Accession Working Party Report, and with Articles VIII:1(a), VIII:4, X:1, X:3(a), and XI:1 of
the GATT 1994.

2WT/DS394/R; WT/DS395/R; WT/DS398/R, 5 July 2011 (collectively, the "Panel Reports"). At its
meeting on 21 December 2009, the Dispute Settlement Body (the "DSB") established a single Panel for all three
complaints in accordance with Article 9.1 of the DSU (WT/DSB/M/277). Pursuant to a joint request by the
United States and Mexico, the Panel issued its findings in the form of a single document containing three
separate reports, with common descriptive and analytical sections, but separate conclusions and
recommendations for each complaining party, each of wh ich bears only the document symbol for that report.
(Panel Reports, paras. 6.74 and 8.1) In our Reports, when referring to more than one of the complainants, we
mostly refer to the United States first, then to the European Union, and then to Mexico, in keeping with the
chronology of the DS numbers assigned to these disputes.
3Request for the Establishment of a Panel by the United States, WT/DS394/7.
4Request for the Establishment of a Panel by the European Communities, WT/DS395/7.
5Request for the Establishment of a Panel by Mexico, WT/DS398/6.
6Further details regarding the products at issues in this dispute are provided in paragraph 2.2 of the
Panel Reports.
7WT/L/432.
8WT/ACC/CHN/49 and Corr. 1.
9Panel Reports, para. 2.1.
10Panel Reports, para. 2.1.

3. On 30 March 2010, China requested a preliminary ruling by the Panel regarding the
consistency of the complainants' panel requests
11 with the requirements of Article 6.2 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"). In
particular, China alleged that the complainants' pa nel requests: (i) did not clearly and specifically
identify which measures were bei ng challenged and for which raw ma terials; and (ii) failed to
provide a brief summary of the legal basis of the co mplaint sufficient to present the problem clearly,
because the measures identified in Section III of each of the panel requests were not plainly connected
to the list of treaty provisions that the complainan ts claimed were being infringed. The Panel issued
its preliminary ruling in two phases. 12 With the exception of one claim by the European Union, the
Panel found the complainants' panel requests sufficient to comply with Article 6.2 of the DSU.13
4. As regards the substantive claims raised by th e complainants, the Panel addressed each of the
four types of export restraints imposed by Ch ina, as well as aspects of the administration and
application of certain export measures. The Panel first considered whether the export duties imposed
by China on certain forms of bauxite, coke, fluo rspar, magnesium, manganese, silicon metal, yellow
phosphorous, and zinc were incons istent with Paragraph 11.3 of China's Accession Protocol.
Paragraph 11.3 requires the elimination of all taxes and charges applied to exports, except as
specifically provided for in Annex 6 to the Protocol or as applied in conformity with Article VIII of
the GATT 1994. The Panel found that, with the ex ception of yellow phosphorous, none of the raw
materials at issue is listed in Annex 6, and thus the materials are not exempt from the requirement to
eliminate export duties. With respect to yellow phosphorous, the Panel found that the 50-per cent
duty imposed on exports of yellow phosphorous, cha llenged by the complainants, had been removed
prior to the establishment of the Panel, and therefore did not make findings with regard to that duty.
14
5. In its defence, China contended that the e xport duties on certain forms of coke, fluorspar,
magnesium, manganese, and zinc were justifie d under Article XX(b) and (g) of the GATT 1994
because these raw materials were exhaustible natura l resources, or because the duties were applied in

11See supra, footnotes 3-5.
12The first phase of the preliminary ruling was issued to the parties on 7 May 2010 and circulated to
WTO Members on 18 May 2010 as document WT/DS394/9, WT/DS395/9, WT/DS/396/8 ("Panel's preliminary
ruling (first phase)"). The second phase of the prelimin ary ruling was issued to the parties on 1 October 2010
and, at the request of the United Stat es and Mexico, circulated only to th e third parties ("Panel's preliminary
ruling (second phase)"). The first an d second phases of the preliminary ruling were attached as Annexes F-1
and F-2 to the Panel Reports. (See Panel Reports, paras. 1.12 and 1.13)
13Panel Reports, paras. 7.1-7.3.
14Panel Reports, sections VII.B.1-VII.B.4.

order to reduce pollution and to protect human health.
15 However, the Panel found that China could
not invoke exceptions under Article XX to jus tify measures found to be inconsistent with
Paragraph 11.3 of China's Accessi on Protocol, because these exceptions apply only to violations of
the GATT 1994, unless specifically incorporated into a non-GATT provision or instrument. The
Panel found that Paragraph 11.3 of China's Accessi on Protocol does not contain any language or
reference that would allow recourse to Article XX of the GATT 1994 for justifying China's export
duties found to be inconsis tent with Paragraph 11.3.16 Even assuming, arguendo, that the exceptions
under Article XX(b) and (g) were available to Ch ina under Paragraph 11.3 of its Accession Protocol,
the Panel found that China had failed to satisfy the requirements of those provisions for the raw
materials at issue.17
6. With regard to export quotas, the Panel found that the quotas imposed on certain forms of
bauxite, coke, fluorspar, silicon carbide, and zinc are inconsistent with Article XI:1 of the
GATT 1994. In addressing China's defence that the export quota applied to one form of bauxite
known as "refractory-grade bauxite" 18 is justified under Article XI:2(a) of the GATT 1994, the Panel
found that the export quota had not been "temporarily applied" in order to "prevent or relieve a critical
shortage" of refractory-grade bauxite w ithin the meaning of Article XI:2(a). 19 The Panel also found
that China had not demonstrated that its export quotas on refractory-grade bauxite, coke, and silicon
carbide were justified under Article XX(b) or (g) of the GATT 1994.20
7. Next, the Panel addressed certain aspects of China's administration and allocation of its export
quotas. The Panel found that the export performan ce and minimum registered capital requirements
imposed by China on the allocation of certain e xport quotas are inconsistent with China's "trading

15China did not seek to justify under Article XX the export duties imposed on bauxite, other forms of
manganese, or silicon metal.
16Panel Reports, section VII.B.5.
17Panel Reports, sections VII.D.2-VII.D.4.
18We note that the complainants and the Panel sometimes referred to this form of bauxite as "high
alumina clay". We will refer to this material throughout these Reports as "refractory-grade bauxite".
19Panel Reports, section VII.D.1.
20Panel Reports, sections VII.D.2-VII.D.4. The Panel found that China had not demonstrated that its
export quotas on coke and silicon carbide are necessary within the meaning of Article XX(b) of the GATT 1994.
(Ibid., para. 7.615) The Panel also found that China had not demonstrated that its export quota on refractory-
grade bauxite relates to the conservation of exhaustible natural resources and was made effective in conjunction
with restrictions on domestic production or consumption pursuant to Article XX(g) of the GATT 1994. ( Ibid.,
para. 7.613) China does not appeal these findings by the Panel. We also note that, before the Panel, China did
not seek to justify under Article XX the quotas imposed on other forms of bauxite, fluorspar, or zinc.

rights" obligations under its Accession Pr otocol and Accession Working Party Report.
21 The Panel,
however, rejected the cl aim that China's prior export perfo rmance requirement operates to the
detriment and exclusion of foreign enterprises. 22 Furthermore, the Panel found that China's allocation
of export quotas through the use of an "operation capacity" criterion contained in Article 19 of China's
Measures for the Administration of Export Commodities Quotas 23 (" Export Quota Administration
Measures") is inconsistent with Article X:3(a) of the GATT 1994, because the lack of any definition,
guidelines, or standards on how to apply this criterion necessarily results in unreasonable and non-
uniform administration.24 The Panel also found that China has acted inconsistently with Article X:1
of the GATT 1994 because it failed to publish promptly the total amount and procedure for the
allocation of export quotas for zinc. 25 The Panel rejected the claim by the United States and Mexico
that China's administration of its export quot as through the involvement of China's Chamber of
Commerce of Metals, Minerals and Chemicals Impor ters and Exporters (the "CCCMC") results in
partial or unreasonable administration inconsis tent with Article X:3(a) of the GATT 1994. 26 T h e
Panel also rejected the claims by the United States and Mexico that China's allocation of export
quotas for certain forms of bauxite, fluorspar, and silicon carbide through a quota-bidding process,
based on a "bid-winning price", is inconsiste nt with Article VIII:1(a) of the GATT 1994 and
Paragraph 11.3 of China's Accession Protocol.
27
8. Regarding China's export licensing system for certain forms of bauxite, coke, fluorspar,
manganese, silicon carbide, and zinc, the Panel found that the system is not per se inconsistent with
China's obligations under Article XI:1 of the GATT 1994. 28 However, the Panel found that China's
export licensing authorities had the discretion to re quest undefined "other" documents or materials
from enterprises applying for such licences, and that this creates uncertainty and constitutes an export
restriction prohibited under Article XI:1. 29 The Panel declined to make findings on other claims

21Specifically, the Panel found China's prior expo rt performance and minimum registered capital
requirements to be inconsistent with Paragraphs 1.2 and 5.1 of China's Accession Protocol, read with
Paragraphs 83(a), 83(b), 83(d), 84(a), and 84(b) of China's Accession Working Party Report. (Panel Reports,
paras. 7.657-7.670)
22The Panel concluded that China's prior export performance requirement is not inconsistent with
Paragraph 5.2 of China's Accession Protocol, read with Paragraphs 84(a) and 84(b) of China's Accession
Working Party Report. (Panel Reports, paras. 7.671-7.677)
23Measures for the Administration of Export Commodities Quotas, Order No. 12, promulgated by
MOFTEC (now MOFCOM) on 20 December 2001 (Panel Exhibits CHN-312 and JE-76).
24Panel Reports, paras. 7.746 and 7.752.
25Panel Reports, para. 7.807.
26Panel Reports, paras. 7.787 and 7.796.
27Panel Reports, paras. 7.851 and 7.860.
28Panel Reports, para. 7.938.
29Panel Reports, para. 7.948.

regarding China's export licensing system.
30 In addition, the Panel found that China imposes a
requirement to export at a coordinated minimum ex port price ("MEP") certain forms of bauxite, coke,
fluorspar, magnesium, silicon carbide, yellow phosphorous , and zinc that also constitutes a prohibited
export restriction under Article XI:1. The Pane l also found that, by failing to publish promptly
measures through which it administers its MEP require ment, China has acted inconsistently with its
obligations under Article X:1 of the GATT 1994. 31 The Panel, however, declined to make a finding
on whether China's administration of the MEP require ment alleged to apply to yellow phosphorous is
inconsistent with its obligations under Article X:3(a) of the GATT 1994.32
9. On 31 August 2011, China notified the Dispute Settl ement Body (the "DSB") of its intention
to appeal certain issues of law covered in the Panel Reports and certain legal interpretations developed
by the Panel, pursuant to Articles 16.4 and 17 of the DSU, and filed a Notice of Appeal 33 and an
appellant's submission pursuant to Rules 20 and 21, respectively, of the Working Procedures for
Appellate Review34 (the "Working Procedures").
10. On 1 September 2011, the United States, the European Union, and Mexico requested the
Appellate Body Division hearing these appeals to ex tend certain time periods for filing submissions.
In their joint request, the complainan ts referred to Rule 16(2) of the Working Procedures and the
extensive nature of China's appeal. The complainants also indicated that they wished to coordinate
their efforts and submissions to the greatest extent possible. On the same day, the Division invited
China and the third participants to comment on the complainants' request. Written comments were
received from China, Japan, and Saudi Arabia on 2 September 2011. 35 On the same day, the Division
informed the participants and third participants th at it had decided to extend the deadline for the filing

30The Panel declined to make a finding on whether China's export licensing system for certain forms of
bauxite, coke, fluorspar, manganese, silicon carbide, and zinc is inconsistent with Paragraphs 162 and 165 of
China's Accession Working Party Report and Paragraph 1.2 of China's Acce ssion Protocol. (Panel Reports,
paras. 7.960-7.973) The Panel also declined to make a finding regarding the inconsistency of China's export
licensing system for certain forms of bauxite, coke, fluorspar, manganese, silicon carbide, and zinc with
Paragraphs 83 and 84 of China's Accession Working Party Report and Paragraphs 1.2 and 5.1 of China's
Accession Protocol. (Ibid., paras. 7.974-7.983)
31Panel Reports, paras. 7.1088-7.1102.
32Panel Reports, paras. 7.1083-7.1087.
33WT/DS394/11, WT/DS395/11, WT/DS398/10 (attached as Annex IV to these Reports).
34WT/AB/WP/6, 16 August 2010.
35China informed the Division that it opposed the complainants' request. China argued, inter alia, that
the length of its appeal did not justify a departure from the deadlines contained in the Working Procedures for
the filing of other appellants' or appellees' submissions. Japan and Saudi Arabia indicated that they had no
objection to the extension of time-limits requested by the complainants. They asked, however, that additional
time also be granted to third participants for the filing of their submissions, in the event that the Division were to
decide to grant additional time to the participants. No other third participants submitted comments to the
Division.

of any Notice of Other Appeal and other appellant 's submission until 6 September 2011; the deadline
for the filing of the complainants' appellees' subm issions until 22 September 2011; the deadline for
the filing of China's appellee's submission until 26 September 2011; and the deadline for the filing of
third participants' submissions and notifications until 29 September 2011.
11. On 6 September 2011, the United States, the Eur opean Union, and Mexico each notified the
DSB of its intention to appeal certain issues of la w and certain legal interpretations developed by the
Panel in Panel Reports WT/DS394/R, WT/DS395/R , and WT/DS398/R, respectively, pursuant to
Articles 16.4 and 17 of the DSU, and filed a Notice of Other Appeal
36 and an other appellant's
submission pursuant to Rules 23(1) and (3) and 26(2) of the Working Procedures. On 22 September
2011, the United States and Mexico filed a joint appellees' submission 37 and the European Union filed
an appellee's submission.38 On 26 September 2011, China filed an appellee's submission.39
12. On 28 September 2011, Colombia filed a third participant's submission. 40 On the same day,
Ecuador notified its intention to appear at the oral hearing as a third participant. 41 On 29 September
2011, Brazil, Canada, Japan, Korea, Saudi Arabia , and Turkey each filed a third participant's
submission.42 On the same day, Argentina, Chile, Indi a, and Norway each notified its intention to
appear at the oral hearing as a third participant. 43 On 2 November 2011, the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu also no tified the Secretariat of its intention to appear
at the oral hearing as a third participant.44
13. On 29 October 2011, the Chair of the Appellate Body informed the Chair of the DSB that,
due to the significant size, scope, and timing of this appeal and the demands that it, along with the two
other appeals under review, placed on the Appe llate Body and translation services, the

36WT/DS394/12; WT/DS395/12; WT/DS398/11 (attached as Annexes V, VI, and VII to these
Reports, respectively).
37Pursuant to Rules 22, 23(4), and 26(2) of the Working Procedures.
38Pursuant to Rules 22, 23(4), and 26(2) of the Working Procedures.
39Pursuant to Rules 22, 23(4), and 26(2) of the Working Procedures.
40Pursuant to Rules 24(1) and 26(2) of the Working Procedures.
41Pursuant to Rules 24(2) and 26(2) of the Working Procedures.
42Pursuant to Rules 24(1) and 26(2) of the Working Procedures.
43Pursuant to Rules 24(2) and 26(2) of the Working Procedures.
44On 2 November 2011, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
submitted its delegation list for the oral hearing to the Ap pellate Body Secretariat and the participants and third
participants in this dispute. For the purpose of this appeal, we have interpreted this action as a notification
expressing its intention to attend the oral hearing pursuant to Rule 24(4) of the Working Procedures.

Appellate Body Report in this appeal would be ci rculated to WTO Members no later than 31 January
2012.
45
14. On 1 November 2011, China requested an extension of the time allocated for its opening
statement at the oral hearing. On the same day, the Division invited the other participants and the
third participants to comment on China's re quest. Written comments were submitted by the
United States, the European Union, and Mexico on 2 November 2011. 46 By letter of 3 November
2011, the Division informed the participants and third participants that it considered the time allocated
for opening statements to reflect an appropriate balance in the light of the high number of participants
and third participants in the dispute and the time requi red in order to provide the participants and third
participants with a full opportunity to respond to qu estions that would be posed by the Division at the
oral hearing. Consequently, the Division decided not to adjust the amount of time it had allocated to
the participants for their opening statements at the oral hearing.
15. The oral hearing in this appeal was held on 7-9 November 2011. The participants and 11 of
the third participants—Brazil, Canada, Chile, Co lombia, Ecuador, India, Japan, Korea, Norway,
Saudi Arabia, and Turkey—made oral statements. The participants and thir d participants responded
to questions posed by the Members of the Appellate Body Division hearing the appeal.
II. Arguments of the Participants and the Third Participants
A. Claims of Error by China – Appellant
1. Article 6.2 of the DSU
16. China requests the Appellate Body to reverse the Panel's finding that Section III of each of the
complainants' panel requests, entitled "Additional R estraints Imposed on Exportation", complies with
the requirements of Article 6.2 of the DSU, and to find, instead, that Section III of the panel requests
does not comply with Article 6.2, with the excep tion of the complainants' claims regarding the
non-publication of export measures concerning zinc. 47 Consequently, China requests the

45WT/DS394/13, WT/DS395/13, WT/DS398/12.
46The United States, the European Union, and Mexico opposed China's request for additional time.
They submitted that the time allocated to China was greater than in other appeals involving multiple
complainants, and was also al ready proportionally greater than that give n to other participants in situations
comparable to that of China in this dispute.
47China's appellant's submission, para. 5 (referring to Panel's preliminary ruling (second phase), Panel

Appellate Body to reverse the Panel's findings made pursuant to other claims allegedly contained in
Section III of the panel requests.
48
17. China contends that the Panel correctly concl uded that the panel requests set out subsets of
claims concerning subsets of measures, rather than raising all claims listed in Section III of the panel
requests in relation to all measures listed in that section of the panel requests. However, the panel
requests fail to identify which claims were made with respect to which measures. For China, in order
to comply with Article 6.2 of the DSU, the complainants were required plainly to connect the 37 listed
measures with the 13 listed treaty provisions with sufficient precision to identify the specific
combination of measure(s) and claim(s) at issue.
18. China explains that subsequent submissions by the complainants reveal substantial
differences between the United States and Mexico, on the one hand, and the Eu ropean Union, on the
other hand, with respect to the specific combination of measures and claims at issue. Therefore, while
the panel requests are nearly identical, the "probl ems" presented in the three panel requests are
considerably different, thus giving the misleading impression that the three complainants referred the
same matter to the DSB, when in reality the matters are different.
19. Furthermore, China alleges that the Panel found that the panel requests comply with
Article 6.2 not on the basis of the panel requests themselves, but, rather, on additional information
contained in subsequent submissions by the parties. China submits that this amounts to legal error,
because, as found by the Appellate Body in EC and certain member States – Large Civil Aircraft ,
Article 6.2 requires that a panel request, as it existed at the time of filing, comply with Article 6.2, and
that a party's submissions during a panel proceeding cannot cure a defect in a panel request.
49 China
alleges that the Panel, rather than respecting th ese findings, instead encourag ed the complainants to
correct defects in the panel requests in subsequent submissions.50
20. China contends that the Panel observed defects in Section III of the panel requests, and points
to several features of the Panel's reasoning that, in China's view, demonstrate that the Panel itself
recognized that the panel requests did not prov ide the necessary connection between the 37 listed
measures and the 13 listed treaty provisions. Fi rst, the Panel did not accept the complainants'

48Referring specifically to the findings in the Panel Reports in paragraphs 7.669, 7.670, 7.678, 7.756,
7.807, 7.958, 7.1082, 7.1102, 7.1103, 8.4(a)-(b), 8.5(b), 8.6( a)-(b), 8.11(a), (c), (e), and (f), 8.12(b), 8.13(a)-(b),
8.18(a)-(b), 8.19(b), and 8.20(a)-(b).
49China's appellant's submission, para. 65 (referring to Appellate Body Report, EC and certain member

argument that there was no need to establish any connection between the measures and the claims.
Second, in the first phase of its preliminary ruling, the Panel requested the complainants to clarify
which of the listed measures were alleged to be in consistent with which specific WTO obligation.
Third, the Panel requested again, after the first Pane l meeting with the parties, that the complainants
clarify which specific WTO provision(s) each of the measures was allegedly violating. Finally, the
Panel pointed to no language in th e panel requests that indicated that the complainants had in fact
established the connection, but in stead relied on the complainants' subsequent submissions as the
basis for its finding that the panel requests comply with Article 6.2.
21. China further argues that, although the Panel stated that the complainants' first written
submissions provided "sufficient connections" between the measures and the claims at issue, the
complainants in fact provided the connections only in their response to Panel Question 2 following the
first Panel meeting. The Panel expressly acknowledge d this fact when it noted that, in their first
written submissions, the complainants failed to "directly address" the connections between the
measures and claims at issue.
51 Instead, submits China, all three examples listed by the Panel to
illustrate that the complainants had in fact connect ed the measures and claims at issue are taken from
the complainants' response to Panel Question 2 afte r the first Panel meeting, and not from the panel
requests or the first written submissions.
22. Finally, China claims that the Panel frustrate d China's due process rights under Article 6.2 of
the DSU, in particular, China's right to begin prep aring its defence on the basis of the panel requests
and its right to have the scope of the dispute una ltered during the course of the proceedings. China
argues that, with respect to the claims listed in Section III of the panel requests, it was impossible for
China to begin preparing its defence when the panel requests were filed, because the measures
implicated by the different narrative paragraphs, and the claims made regarding those measures, could
not be identified.
2. The Panel's Recommendations
23. On appeal, China seeks review of the Panel' s recommendations concerning export duties and
export quotas "to the extent that [these] recomme ndations apply to annual replacement measures"
adopted after the establishment of the Panel on 21 December 2009. 52 China argues that the
complainants had excluded such measures from th e scope of the dispute and hence, by making

51China's appellant's submission, para. 74 (referring to Panel's preliminary ruling (second phase), Panel
Reports, Annex F-2, para. 32).
52China's appellant's submission, paras. 99 and 136.

recommendations extending to such measures, the Pa nel acted inconsistently with its obligations
under Article 7.1 of the DSU; failed to make an objective assessment of the matter under Article 11
of the DSU; and made recommendations on measur es that were not part of the matter before it,
inconsistently with Article 19.1 of the DSU.
24. China highlights that, under Article 7.1 of the DSU, a panel must respect the mandate
conferred upon it through its terms of reference. This conclusion has been "consistently repeated" by
panels and the Appellate Body
53, and it is well established that "panels 'cannot assume jurisdiction
that [they] do not have'."54 Although, typically, a panel's terms of reference are established by a panel
request, a complainant can limit the panel's terms of reference in several ways—for example, by
withdrawing a claim regarding a measure or by abandoning a complaint entirely. In the present
dispute, the complainants' decision to abandon certain of their claims meant that the Panel could not
make recommendations regarding such claims. In Ch ina's view, the Panel acted inconsistently with
Article 7.1 of the DSU by permitting the complain ants to "evade" the consequences of their own
decision to withdraw annual replacement measures from the scope of the dispute.55
25. China further submits that, by making r ecommendations regarding annual replacement
measures, the Panel failed to make an objective assessment of the matter before it as required under
Article 11 of the DSU. When a panel makes reco mmendations regarding measures that are not a part
of the "matter" before it, it confers an "advantag e" on the complainant, in that it benefits from
recommendations regarding measures that it did not challenge, and places the respondent at a
"disadvantage", by subjecting it to implementati on obligations regarding measures that were not
within the scope of the dispute. 56 China asserts that such an appro ach lacks the "objectivity" required
under Article 11.57
26. China further argues that, in making recommenda tions regarding the "series of measures"
with a prospective life extended through annual repl acement measures, the Panel acted inconsistently
with Article 19.1 of the DSU. 58 In China's view, there is a textual link between a panel's terms of

53China's appellant's submission, para. 137 (referring to Appellate Body Report, Chile – Price Band
System, para. 168; Appellate Body Report, India – Patents (US), para. 92; Appellate Body Report, US –
Carbon Steel, paras. 172-174; Panel Report, US – Continued Zeroing, para. 7.63; and Appellate Body Report,
US – Gambling, para. 281).
54China's appellant's submission, para. 137 (referring to Appellate Body Report, India – Patents (US) ,
para. 92).
55China's appellant's submission, paras. 141-143. (emphasis omitted)
56China's appellant's submission, paras. 145 and 146.

reference under Article 7.1, its duty to make an objective assessment under Article 11, and its
authority to make recommendations under Article 19.1. Specifically, the measures that may be the
subject of recommendations under Article 19.1 are the same measures to which Articles 7.1 and 11
refer, that is, the measures included in the panel's te rms of reference. China highlights that the Panel
made recommendations regarding a "so-called 'series of measures'", attributing to this concept an
"ongoing legal character stretching into the future", despite the fact that the complainants had argued
that no recommendations could or should be made regarding annual replacement measures. China
also notes that the complainants never argued that the export duty and export quota measures at issue
in this dispute have prospective application through annual replacement measures.
59
27. China also takes issue with the Panel's c onclusion that it could make recommendations
extending to annual replacement me asures in order to "ensure that the dispute settlement system
functions efficiently in resolving disputes". 60 Referring to Articles 3.4 and 3.7 of the DSU, the Panel
was "concerned" that, if it did not address annua l replacement measures, it would not effectively
resolve the dispute. 61 However, since the complainants ha d decided to exclude annual replacement
measures from the dispute, there was no dispute to resolve regarding annual replacement measures.
Past disputes, including US – Continued Zeroing , show that the WTO dispute settlement system is
"perfectly effective" in resolving disputes re garding measures with general and prospective
application.62 China asserts that there is a crucial di fference between such disputes and the present
one, in which the complainants "actively decided to exclude" annual replacem ent measures from the
dispute.63 Since the complainants were "well aware" that they could pursue a claim against annual
replacement measures, but chose not to, the comp lainants must bear the consequences of their
decision.64
3. Applicability of Article XX of the GATT 1994
28. China alleges various errors in the Panel's analysis and requests the Appellate Body to reverse
the Panel's finding that China may not seek to just ify export duties found to be inconsistent with
Paragraph 11.3 of China's Accession Protocol pursuant to Article XX of the GATT 1994.
Specifically, China contends that the Panel erred in determining that there is "no textual basis" in
China's Accession Protocol for its right to invoke Article XX in defence of a claim under

63China's appellant's submission, para. 165. (emphasis omitted)

Paragraph 11.3.
65 According to China, the Panel's findi ng that Paragraph 11.3 excludes recourse to
Article XX of the GATT 1994 was based on the Panel's erroneous assumption that the absence of
language expressly granting the right to regulate trad e in a manner consistent with Article XX means
that China and other Members intended to deprive China of that right.
(a) Paragraph 11.3 of China's Accession Protocol
29. China observes that Paragraph 11.3 of its Acc ession Protocol requires that it eliminate export
taxes and charges, unless they are specifically provided for in Annex 6 thereto or applied consistently
with Article VIII of the GATT 1994. As such, the ob ligation under Paragraph 11.3 is first "qualified"
by Annex 6 of China's Accession Protocol, which provides a schedule of the maximum export duty
rates applicable to 84 products, along with a Note th at "sets forth an exception to China's obligations
regarding export duties".
66 At the Panel stage, the European Union claimed that China had violated
its obligations under Annex 6 "by fa iling to consult with affected Members prior to the imposition of
export duties on particular forms of bauxite, c oke, fluorspar, magnesium, manganese, silicon metal
and zinc, none of which is among th e 84 listed products in Annex 6".67 China further emphasizes that
the Panel ruled in favour of the European Union, co ncluding that China has acted inconsistently with
its obligations under Annex 6 because it failed to cons ult with other affected WTO Members prior to
imposing export duties on these products. 68 Highlighting that none of the products subject to the
European Union's claim is included in the Annex 6 schedule, China argues that the European Union's
claim and the Panel's ruling necessarily mean that "t he exception in Annex 6 permits China to impose
export duties on all products, provided there are 'excep tional circumstances', and that China consults
with affected Members."69
30. China argues that the reference to "exceptiona l circumstances" in the Note to Annex 6
demonstrates a "substantive overlap" between the sc opes of the exceptions set forth in Annex 6 to
China's Accession Protocol and Article XX of the GATT 1994, respectively. 70 Although the Note
does not prescribe the specific circumstances in which the Annex 6 exception would apply, the
ordinary meaning of "exceptional" establishes that these circumstances "must be unusual and

67China's appellant's submission, para. 213 (referring to European Union's first written submission to
the Panel, paras. 254, 258, 262, 266, 270, 274, 278, 282, 286, 290, 294, 298, 302, 306, and 310).

special".
71 China asserts that the circumstances provided in the various subparagraphs of Article XX
are "exceptional" within the meaning of the Note to Annex 6 because they allow a Member to depart
from an "affirmative obligation", and because the ci rcumstances enumerated in Article XX "are both
unusual and special". 72 This demonstrates that the obligation to eliminate export duties is "not
absolute" and "unqualified", and that China has "ret ained its inherent right to regulate trade using
export duties to promote non-trade interests in 'exceptional circumstances'". 73 China adds that, by
allowing China to adopt otherwise WTO-inconsiste nt export duties in "exceptional circumstances",
the Note to Annex 6 demonstrates China's and othe r WTO Members' shared intent that China may
have recourse to the "exceptional circumstances" set out in Article XX to justify export duties. China
also argues that the Panel's finding that a "provision-specific" excep tion in Paragraph 11.3 of China's
Accession Protocol precludes the applicability of Article XX is erroneous, because it is not
"uncommon" to find provision-specific exceptions coupl ed with a right of recourse to more general
exceptions, as in Article XI:2 of the GATT 1994.74
31. China claims that the reference to Article VIII of the GATT 1994 in Paragraph 11.3 of its
Accession Protocol confirms the applicability of Ar ticle XX of the GATT 1994. China reasons that
Paragraph 11.3 requires that export ta xes and charges be applied in c onformity with the provisions of
Article VIII of the GATT 1994. According to China, "[i]f they are not, the measure violates both
Paragraph 11.3 and Article VIII." 75 For China, "[i]n the event that a measure violates Article VIII of
the GATT 1994, it may, of course, be justifie d under Article XX of the GATT 1994", such that
"[China] is not deprived of its right to justify a measure that violates Article VIII through recourse to
Article XX simply because a complainant chooses to bring a claim under Paragraph 11.3" of China's
Accession Protocol.76 In China's view, the fact that Article VIII applies to certain export charges and
fees covered by Paragraph 11.3, and not specifically to export duties, does not render the reference to
Article VIII irrelevant, as the reference shows that the obligations under Paragraph 11.3 are not
absolute and unqualified, and that China did not agree to abandon its right to resort to Article XX.
(b) Context from the WTO Agreement
32. China asserts that, by virtue of Paragraph 34 2 of China's Accession Working Party Report
and Paragraph 1.2 of its Accession Protocol, Para graph 170 of the Accession Working Party Report

73China's appellant's submission, para. 219. (emphasis omitted)
76China's appellant's submission, paras. 224 and 225.

and Paragraph 11.3 of Chin a's Accession Protocol are on an "equ al legal footing", and are "integral
parts" of the same accession agreement, as well as the WTO Agreement.
77 In China's view, the fact
that the title of the subsection of China's Accession Working Party Report under which Paragraph 170
falls and the title of the provision that includes Pa ragraph 11.3 of its Accession Protocol are "exactly
the same" provides a "powerful textual indication" that the subject matter of Paragraph 11.3 and
Paragraph 170 overlap.78 Since both provisions apply to "'taxe s' and 'charges' on 'exports'", the use of
identical language suggests that there is a "very c onsiderable overlap" between the measures to which
the provisions apply and that they impose "cumul ative obligations" with respect to "taxes and
charges".79
33. Referring to the ordinary meaning of the term s "taxes" and "charges", and the substantive
overlap between Paragraph 11.3 a nd Paragraph 170, China disagrees with the Panel's conclusion that
Paragraph 170 does not apply to export duties, wher eas Paragraph 11.3 does. In so finding, the Panel
erred in relying on Paragraph 155 and Paragraph 156 of China's Accession Working Party Report,
which, the Panel found, deal with export duties a nd do not incorporate Article XX of the GATT 1994.
Unlike Paragraph 170, Paragraphs 155 and 156 are not incorporated into Chin a's Accession Protocol
and are, therefore, of "secondary importance" in interpreting the scope of China's obligations.80
34. China also takes issue with the Panel's reasoni ng that Paragraph 170 does not apply to export
duties because it applies to domestic taxes. Ch ina argues that, similar to Paragraph 11.3,
Paragraph 170 refers to "'taxes' and 'charges' in relation to ' exports'", and that neither provision refers
to "domestic" or "internal" taxes and charges.81 Although section IV.D of China's Accession Working
Party Report, of which Paragraph 170 is a part, d eals with "internal policies", the heading of the
subsection under which Paragraph 170 falls (IV.D.1.) is "Taxes and Charges Levied on Imports and
Exports".82 Finally, China argues that Paragraph 171, dealing with subsidies contingent on
exportation, shows that this subsection "may deal with" export duties.83
35. China disagrees with the Panel's finding that Paragraph 170 essentially repeats the
commitments existing under certain GATT 1994 rules. The text of Paragraph 170 indicates that its
commitments therein extend to all of its "WTO obligations", including, but not limited to, those

78China's appellant's submission, para. 232. (emphasis omitted)
79China's appellant's submission, para. 233. (emphasis omitted)
81China's appellant's submission, para. 239. (original emphasis)
82China's appellant's submission, para. 239. (emphasis omitted)

imposed by the GATT 1994.
84 The phrase "WTO obligations" in Paragraph 170 includes obligations
under Paragraph 11.3 of China's Accession Protocol . If export duties are inconsistent with its
obligations under Paragraph 11.3, they are also in consistent with Paragraph 170. Based on this
observation, China argues that "any flexibilities that Paragraph 170 affords to China to adopt
otherwise WTO-inconsistent export 'taxes' and 'charges' must extend equally to Paragraph 11.3."85
36. China highlights that the Panel appeared "to agree that the language in Paragraph 170 permits
recourse to Article XX", at least in the context of Paragraphs 11.1 and 11.2 of China's Accession
Protocol.86 Specifically, the Panel's findings that the inclusion of the phrase "shall be in conformity
with the GATT 1994" in Paragraphs 11.1 and 11.2, a nd its "deliberate exclusion" in Paragraph 11.3,
"reflected 'agreement'" that Article XX does not apply to Paragraph 11.3, are significant since they
"demonstrate the Panel's acceptance" that such language incorporates Article XX. 87 H o w e v e r , i n
China's view, if such language can incorporate Arti cle XX into Paragraphs 11.1 and 11.2, "the same
language" in Paragraph 170 must also be "sufficient" to incorporate Article XX.88 China asserts that a
harmonious interpretation of Paragra ph 11.3 and Paragraph 170 "dictates" that, if an export duty is in
full conformity with China's obligations under Artic le XX pursuant to Paragraph 170, it "must also be
in full conformity" with China's obligations under Paragraph 11.3.89
37. China takes issue with the Panel's reasoning un der which "China must eliminate export duties
pursuant to Paragraph 11.3, even if these duties serve legitimate public health or conservation
goals."90 China argues that the Panel's approach is c ontrary to the text, context, and object and
purpose of the WTO Agreement and "leads to an absurd outcome". 91 Interpreting Paragraph 11.3 of
China's Accession Protocol "to mean that China h as abandoned the right to impose export duties in a
manner consistent with Article XX of the GATT 1994, as the Panel did, is irreconcilable with the fact
that", under Article XI:1, China can impose expor t quotas in a manner consistent with Article XX. 92
China adds that, "[i]f the Panel's interpretation we re accepted, China could not impose, for example,
an export duty in a manner consistent with Artic le XX of the GATT 1994, whereas it could justify
under Article XX an export quota on the same goods, and with equivalent trade restrictive and welfare

86China's appellant's submission, para. 255. (emphasis omitted)
87China's appellant's submission, paras. 256 and 257. (emphasis omitted)
91China's appellant's submission, paras. 268 and 269.

effects."
93 Further, the preamble of the WTO Agreement confirms that obligations in the covered
agreements, such as Paragraph 11.3 of China's Accession Protocol, do not impose absolute
prohibitions on the right to regulate trade. Chin a considers that Members are entitled to regulate
trade, for example, "through export duties, for the purpose of pursuing the objectives set forth in the
Preamble, provided they do so in conformity with the requirements in Article XX of the
GATT 1994".94
(c) The Inherent Right to Regulate Trade
38. China argues that, "like any other State" , it enjoys the right to regulate trade. 95 Referring to
the Appellate Body report in China – Publications and Audiovisual Products , China asserts that such
a right to regulate trade is an "inherent right" vested in States, and "not a 'right bestowed by
international treaties such as the WTO Agreement'".96 China further argues that the preamble of the
WTO Agreement recognizes that the WTO covered agreements, including China's Accession Protocol,
"preserve the basic disciplines underlying the multilat eral trading system, which includes respect for
the inherent right to regulate trade". 97 In acceding to the WTO, Memb ers agree to exercise their
inherent right in conformity with disciplines set out in the covered agreements, either by complying
with affirmative obligations or with the "obligatio ns attaching to an exception, such as those included
in Article XX".98 China also refers to the texts of th e first recital of the preamble of the Agreement on
the Application of Sanitary and Phytosanitary Measures (the " SPS Agreement"), the sixth recital of
the preamble of the Agreement on Technical Barriers to Trade (the "TBT Agreement"), the preamble
of the Agreement on Import Licensing Procedures (the " Import Licensing Agreement "), the fourth
recital of the preamble of the General Agreement on Trade in Services (the "GATS"), and the
preamble and Article 8.1 of the Agreement on Trade-Related Aspects of Intellectual Property Rights
(the " TRIPS Agreement") to argue that, by acceding to the WTO, Members preserve their right to
regulate trade to achieve legitimate objectives.99
39. In China's view, the appropriate interpretative question is whether Paragraph 11.3 of China's
Accession Protocol explicitly excludes this right and not whether the language explicitly reaffirms this

96China's appellant's submission, para. 275 (quoting Appellate Body Report, China – Publications and
Audiovisual Products, para. 222; and referring to Panel Report, Argentina – Hides and Leather, para. 11.98).

right. China's Accession Protocol and Accession Working Party Report contain no language showing
that China "abandon[ed]" its inherent right to regulate trade to promote fundamental non-trade
objectives. Instead, its accession commitments "indicate" that it retains this right.
100 C h i n a
emphasizes that its interpretation of Paragraph 11.3 does not mean that China can evade its WTO
obligations, as it still must demonstrate complia nce with the "conditions and limitations" of
Article XX of the GATT 1994. 101 According to China, the "sugges tion" that an "inherent power" can
be denied "unless expressly re-affirmed" is contrary to the "harmonious interpretation" of the covered
agreements required by the Appellate Body. 102 Moreover, "[a]ny such suggestion turns inherent
rights into acquired rights, autonomy into heteronomy, and the single undertaking into a series of
detached agreements".103 China further alleges that the Panel' s interpretation distorts the balance of
rights and obligations that were established when China acceded to the WTO.
4. Article XI:2(a) of the GATT 1994
40. China requests the Appellate Body to reverse the Panel's interpretation and application of
Article XI:2(a) of the GATT 1994 reached as part of the Panel's finding that China had not
demonstrated that its export quota on refractory-gr ade bauxite is temporarily applied to prevent or
relieve a critical shortage. 104 In particular, China alleges that th e Panel erred in its interpretation and
application of the term "temporarily" and in its inte rpretation of the term "critical shortages", because
it effectively excluded from the scope of the pr ovision export restrictions on non-renewable,
exhaustible natural resources. In addition, China alleges that the Panel failed to make an objective
assessment of the matter as required by Article 11 of the DSU.
41. First, with respect to the Panel's interpretati on of the term "temporarily", China agrees with
the Panel's finding that the word "temporarily" "sug gest[s] a fixed time-limit for the application of a
measure".105 The Panel, however, subseque ntly "adjusted" its interpretation of the term "temporarily"
to exclude the "long-term" application of export restri ctions, by stating that Article XI:2(a) could not
be interpreted "to permit the long-te rm application of … export restri ctions" or to "permit long-term

102China's appellant's submission, para. 291 (referring to Appellate Body Report, Argentina – Footwear
(EC), para. 81; Appellate Body Report, India – Patents (US) , para. 45; Appellate Body Report, Japan –
Alcoholic Beverages II, p. 12, DSR 1996:I, 97, at 106; Appellate Body Report, Korea – Dairy , para. 81; and
Appellate Body Report, US – Gasoline, p. 25, DSR 1996:I, 3, at 23).
103China's appellant's submission, para. 291. (original emphasis)
104In particular, China refers to paragraphs 7.257, 7.258, 7.297-7.302, 7.305, 7.306, 7.346, 7.349,
7.351, 7.354, and 7.355 of the Panel Reports. (China's appellant's submission, paras. 299 and 388)

measures to be imposed".
106 The Panel's approach suggests that Article XI:2(a) imposes an absolute
limit on the length of time an export restriction may be imposed. China, however, maintains that the
words "to prevent or relieve" in Article XI:2(a) s uggest that the term "temporarily" does not mark a
"bright line" moment in time after which an export restriction has necessarily been maintained for too
long.107 Instead, whether an export restriction is applied "temporarily" depends on the period of time
required to prevent or relieve the critical shortage. China also argues that the Panel erred in finding
that Article XI:2(a) and Article XX(g) are mutually exclusive, and contends th at this finding was the
basis for the Panel's erroneous interpretation of th e term "temporarily" in Article XI:2(a). China
submits that the two provisions are not mutually exclusive, but apply cumulatively.
42. Second, with regard to the Panel's application of the term "temporarily", China alleges that
the Panel failed to take into consideration the fact that China's export restrictions on refractory-grade
bauxite are subject to annual review. China fau lts the Panel for "simply assum[ing]" that China's
restriction on exports of refractory-grade bauxite will be maintained indefinitely. 108 China submits
that, at the close of each year, the factual circumstan ces are assessed in the light of the legal standard
set forth in Article XI:2(a) to establish whether the export restriction should be maintained.
43. Third, China maintains that the Panel erred in its interpretation of the term "critical shortages"
as excluding shortages caused by the "finite" na ture or "limited reserve[s]" of a product. 109 China
agrees with the Panel's interpretation of the term "critical shortages" as meaning a deficiency in
quantity "involving suspense or grave fear", of "decisive importance". 110 China alleges, however, that
the Panel erred in excluding from the scope of Article XI:2(a) shortages caused by the limited, finite,
or exhaustible nature of the product. China main tains that, had the drafters intended to limit the
applicability of Article XI:2(a) to renewable re sources, such as "foodstuffs", they would have
indicated that by employing the term "other renewa ble products", instead of "other products", or by
explicitly excluding "exhaustib le natural resources" from the scope of Article XI:2(a). 111 For China,
the Panel's interpretation leads to "absurd" distin ctions, because Article XI:2(a) cannot be used to
justify export restrictions on exhaustible natural re sources, such as bauxite, but it could be used to

106China's appellant's submission, para. 336 (quoting Panel Reports, paras. 7.298 and 7.305; and
referring to para. 7.349).
108China's appellant's submission, para. 349 (quoting the Panel's statement at paragraph 7.350 of its
Reports that there is "every indication that [China's restriction on exports of refractory-grade bauxite] will
remain in place until the reserves have been depleted").
109China's appellant's submission, para. 356 (quoting Panel Reports, paras. 7.297 and 7.305).
110China's appellant's submission, para. 357 (quoting Oxford English Dictionary Online , 2nd edn
(Oxford University Press, 1989) (Panel Exhibit CHN-189)).
111China's appellant's submission, paras. 361 and 362. (emphasis omitted)

justify restrictions concerning natural res ources that can be renewed, such as wheat.
112 In China's
view, the fact that a product cannot be renewed ma y exacerbate the consequences of a shortage, thus
making it particularly important to impose a restriction that will alleviate the shortage.
44. China alleges that the Panel committed an additi onal error in its interpretation of "critical
shortage" by assuming that there is no possibility for an existing shortage of an exhaustible natural
resource ever to cease to exist, and that, therefore, it would never be possible to "relieve or prevent"
the shortage through an export restriction applied on a temporary basis. 113 China submits that a
shortage of an exhaustible natu ral resource could cease to exist independently from depletion, for
instance, where additional reserves or new extraction methods are discovered, or where substitutes or
new technologies replace the product. China adds that, elsewhere in its analysis, the Panel recognized
that shortages of exhaustible natural resources ar e not inevitable, and that advances in reserve
detection or extraction techniques could alleviate or eliminate a shortage of an exhaustible natural
resource.
45. Finally, China advances two separate claims th at the Panel failed to make an objective
assessment of the matter pursuant to Article 11 of the DSU. First, the Panel failed to assess properly
evidence that China's export restriction on refractory-grade bauxite is annually reviewed and renewed.
China submits that evidence relati ng to China's annual review procedure demonstrates that the export
restriction will be maintained only as long as justifie d to prevent or relieve the critical shortage of
refractory-grade bauxite. For China, this eviden ce shows that the Panel erred in assuming that the
restriction "will remain in place until the reserves have been depleted". 114 Second, China asserts that
the Panel employed internally inconsistent or inc oherent reasoning in stating, on the one hand, that
"there is no possibility for an existing shortage [of an exhaustible natural resource] ever to cease to
exist" such that "it will not be possible to 'relieve or prevent' it through an export restriction applied on
a temporary basis" 115 and acknowledging, on the other hand, that "advances in reserve detection or
extraction techniques", or the availability of "add itional capacity", could "alleviate or eliminate" a
shortage of an exhaustible natural resource, or that "new technology or conditions" might "lessen
demand" for the resource.116

115China's appellant's submission, para. 373 (referring to Panel Reports, para. 7.297). (emphasis added
by China omitted)
116China's appellant's submission, para. 373 (referring to Panel Reports, paras. 7.348 and 7.351).

5. Article XX(g) of the GATT 1994
46. China had also contended before the Panel that , even if its quotas on refractory-grade bauxite
did not fall within the exception of Article XI:2(a ), the quotas could be justified under Article XX(g)
of the GATT 1994. However, the Panel found that China had not demonstrated that its quotas met the
requirements of Article XX(g). China requests the Appellate Body to find that the Panel erred in
interpreting the phrase "made effective in conjunc tion with" in Article XX(g) of the GATT 1994 to
mean that, in order to be justified under Artic le XX(g), a challenged measure must satisfy two
cumulative conditions: first, it must "be applied jointly with" restrictions on domestic production or
consumption; and, second, the "purpose" of the challenged measure must be to make effective
restrictions on domestic production or consumption. 117 China argues that the second element of the
Panel's interpretation is inconsis tent with the ordinary meaning of the phrase "made effective in
conjunction with". China, however, does not appeal the Panel's ultimate conclusion that China has
not demonstrated that its export quota on refract ory-grade bauxite is justified pursuant to
Article XX(g).
47. China submits that the Appellate Body's interp retation of the term "i n conjunction with" in
US – Gasoline corresponds to the first element of the Panel's interpretation of that phrase, namely that
the challenged measures "be applied jointly with " restrictions on do mestic production or
consumption.118 However, nothing in the phrase "made e ffective in conjunction with" suggests that
the "purpose" of a challenged measure must be to ensure the effectiveness of domestic restrictions. 119
Instead, China contends that a measure restricting international trade must operate together with
restrictions on domestic production or consumption, with both sets of restrictions forming part of a
policy relating to the conservation of the resource in question.
6. Prior Export Performance and Minimum Capital Requirements
48. China appeals the Panel's finding that Paragraphs 1.2 and 5.1 of China's Accession Protocol,
read in combination with Paragraphs 83(a), 83(b) , 83(d), 84(a), and 84(b) of China's Accession
Working Party Report, require China to eliminat e any examination and approval system for WTO-
consistent export quotas operated after 11 December 2004, including prior export performance and
minimum registered capital requirements. China alleges various errors in the Panel's analysis.

118China's appellant's submission, paras. 404-406 (referring to Appellate Body Report, US – Gasoline,
pp. 22-23, DSR 1996:I, 3, at 20-21).

49. Referring to the Appellate Body report in China – Publications and Audiovisual Products ,
China argues that the introductory phrase to Pa ragraph 5.1 means that China's trading rights
obligations cannot "affect, encroach upon, or impair " its right to regulate trade in a WTO-consistent
manner.
120 In particular, Paragraph 5.1 entitles it to adopt export quotas that are contrary to
Article XI:1 of the GATT 1994, as long as they are justified under an exception such as Article XI:2
or XX of the GATT 1994. Paragraph 5.1 also entitles China to administer export quotas through an
examination and approval system, including quot a allocating criteria, provided that the system
complies with the relevant WTO disciplines. China emphasizes that it "is not obliged by its accession
commitments to abandon its WTO-consistent regula tion of its export trade in order to confer upon
traders an unfettered right to export".
121
50. China further observes "that the authority of WTO Members to use prior export performance
as a criterion in allocating import and export quot as is supported by the text of the covered
agreements".122 In particular, Article 3.5(j) of the Import Licensing Agreement "not only affirms the
right of a Member to take account of prior import performance in allocating import licenses, it
expressly requires that such performance be considered". 123 Paragraph 130(a)(ii) of China's
Accession Working Party Report also explicitly refers to "historical performance" as a criterion for
quota allocation.124 Further, Article XIII:2(d) of the GA TT 1994 describes the circumstance in which
quotas may be allocated among Members "based upon th e proportions, supplied by such Members
during a previous representative period, of the tota l quantity or value of imports of the product". 125
The Appellate Body has stated that this provision allows quota allocation by supplying countries "in
accordance with the proportions supplied by those Members during a previous representative period,
taking due account of 'special factors'". 126 According to China, Article XIII:2(d), "therefore, also
supports the view that past trading performance is a relevant consideration in deciding to whom to
allocate shares of a quota".127

120China's appellant's submission, para. 441 (quoting Appellate Body Report, China – Publications and
Audiovisual Products, para. 219).
121China's appellant's submission, para. 456. (original emphasis)
123China's appellant's submission, para. 464. (original emphasis)
124China's appellant's submission, para. 464. Paragraph 130(a)(ii) of China's Accession Working Party
Report is included in China's Accession Protocol and is an integral part of the WTO Agreement by virtue of
Paragraph 342 of China's Accession Working Party Report and Paragraph 1.2 of China's Accession Protocol.
126China's appellant's submission, para. 465 (quoting Appellate Body Reports, EC – Bananas III
(Article 21.5 – Ecuador II)/EC – Bananas III (Article 21.5 – US), para. 338).

51. In China's view, minimum registered capital a nd prior export performance requirements serve
important purposes, such as, ensuring that exporte rs are financially sound and have the necessary
means to engage in export trade. China recognizes that, in the "ordinary course" of trade, it is
required to grant the right to trade to all enterpri ses; however, "in the exceptional event" that it can
maintain an export quota for a particular product, China submits that it may establish quota allocation
rules that restrict the right to trade, provided th at such rules are not inconsistent with the WTO
disciplines applicable to such measures.
128
52. China further argues that the Panel misinterpreted the text of Paragraph 83(b) of China's
Accession Working Party Report in finding that it "directs China to eliminate any 'examination and
approval system' within three years of accession, including specifically the elimination of minimum
registered capital requirements".129 China reasons that the final sentence of Paragraph 83(b) applies to
the particular examination and approval process for Ch inese-invested enterprises that is described in
the first sentence of Paragraph 83(b), and that th e Panel erroneously gave Paragraph 83(b) such a
broad scope of application as to prohibit any examination and approval system.
7. China's "Operation Capacity" Criterion and Article X:3(a) of the GATT 1994
53. China requests the Appellate Body to reverse the Panel's findings concerning the
inconsistency of Article 19 of China's Export Quota Administration Measures and the "operation
capacity" criterion for quota allocation with Article X:3(a) of the GATT 1994. China submits that, in
reaching these findings, the Panel erred in its interpre tation and application of Article X:3(a) of the
GATT 1994 and acted inconsistently with Article 11 of the DSU.
54. According to China, the Panel erred in interpreting the term "administer" in Article X:3(a) to
mean that WTO-inconsistent administration ari ses if a measure does not necessarily lead to, but
merely poses, a "very real risk of" such administ ration. For a claim under Article X:3(a) to succeed,
the Appellate Body has required that the complainant prove that such legal instruments or the features
of such administrative processes "necessarily lead to a lack of uniform, impartial, or reasonable
administration".130 However, under the Panel's standard, a violation would also be found "if the
complaining party shows that the features of an ad ministrative process pose a very real risk to the

129China's appellant's submission, para. 469 (quoting Panel Reports, para. 7.655). (emphasis added by
China)
130China's appellant's submission, para. 639 (referring to Appellate Body Report, EC – Selected
Customs Matters , paras. 201 and 226; and referring to Panel Report, Thailand – Cigarettes (Philippines) ,
paras. 7.873, 7.909, and 7.929).

interests of the relevant parties".
131 For China, there is a signi ficant difference between the two
standards, given than an administrative process that creates a risk to a trader's interests does not
"necessarily lead to" WTO-inconsistent administrati on. China emphasizes that a theoretical risk,
possibility, or danger of a WTO Member choosing a WTO-inconsistent course of action that is not
mandated by the measure is not sufficient to sup port a finding that the measure "as such" is
inconsistent with Article X:3(a), absent evidence that the measure has been interpreted and applied in
a WTO-inconsistent manner. Yet, several of the Pa nel's statements demonstrate that the Panel "based
its findings on the mere risk or possibility that China might administer the 'operation capacity'
criterion in a manner that violates Article X:3(a)". 132 China adds that the Panel did not find that the
"operation capacity" criterion "necessarily leads to" WTO-inconsistent administration. Nor did it
have before it evidence demonstrating the WTO- inconsistent application of the measure.
Consequently, there was no basis for the Panel to find that, where Chinese authorities exercise their
discretion to interpret and apply the "operation capacity " criterion, they will do so in a manner that is
inconsistent with Article X:3(a).
55. China further asserts that the Panel acted inc onsistently with Article 11 of the DSU by
finding, without a sufficient evidentiary basis, th at the "operation capacity" criterion is "as such"
inconsistent with Article X:3(a) of the GATT 1994. China points out that the Panel itself found that
the term "operation capacity" was "vague" and "undef ined", and that the European Union provided no
evidence of the WTO-inconsistent appl ication by China of the criterion.
133 Further, the Panel had no
other evidence as to the operation of the measure, such as pronouncements of domestic courts on the
meaning of such laws, or the opinions of legal experts. China asserts that every WTO Member is
entitled to the presumption that its authorities will ac t in accordance with its WTO obligations. China
alleges that the Panel reversed this presump tion by assuming that the Chinese authorities would
interpret and apply the "operation capacity" requirement in a WTO-inconsistent manner.
8. China's Export Licensing Requirements and Article XI:1 of the GATT 1994
56. China requests the Appellate Body to reverse the Panel's finding that Article 11(7) of China's
Measures for the Administration of Licence for the Export of Goods 134 (the " 2008 Export Licence

131China's appellant's submission, para. 640 (quoting Panel Reports, para. 7.708 (original emphasis
omitted)).
132China's appellant's submission, para. 669. (emphasis omitted)
133China's appellant's submission, para. 680 (quoting Panel Reports, para. 7.710 and footnote 1059
thereto).
134Measures for the Administration of Licence for the Export of Goods, Order of the Ministry of
Commerce (2008) No. 11, 1 July 2008 (Panel Exhibits CHN-342 and JE-74).

Administration Measures"), and Articles 5(5) and 8(4) of China's Working Rules on Issuing Export
Licences
135 (the " 2008 Export Licensing Working Rules "), as applicable to export licences granted to
applicants to export bauxite, coke, fluorspar, manga nese, silicon carbide, and zinc, are inconsistent
with Article XI:1 of the GATT 1994.136
57. China submits that the Panel erred in interpreting the term "restriction" in Article XI:1 of the
GATT 1994 to prohibit a measure "as such", based on the theoretical possibility that an export
restriction might arise from the interpretation and application of undefined terms in the measure,
absent evidence that the m easure has been applied in a WTO-inconsistent manner. Referring to the
dictionary meaning of the word "restriction", Ch ina argues that not all regulation of imports and
exports constitutes a "restriction". To China, the u se of the term "quantitative restriction" in the title
of Article XI suggests that Article XI covers only those restrictions that have a "limiting effect" or
impose a "'limiting condition' on the quantity of exports".137 China submits that such a limiting effect
on the quantity of exports cannot be assumed from the mere regulation of exports. Rather, a panel
must examine the design, structure, and operation of the measure in order to assess whether it does
indeed limit the quantity of exports.
58. In the case of licensing requirements, China argues that the Import Licensing Agreement
provides context to assist in identifying the divi ding line between permissible and impermissible
regulation under Article XI:1 of the GATT 1994. The fact that the Import Licensing Agreement
imposes disciplines on licensing, without prohibiting it, underscores that licensing requirements are
not a priori impermissible. China agrees with the Panel that the determination of whether a
documentary requirement constitutes a restriction tu rns on the "nature" of the document required, and
whether that documentary requirement has a limiting effect.
138
59. China maintains that the object and purpose unde rlying Article XI:1 is to protect competitive
opportunities rather than trade flows, and that pa nels and the Appellate Body have ensured this
protection by permitting a challenge to a measure "as such", independent of its application. China
contends that the factual uncertainty surrounding th e "expected operation" of a measure does not alter
the interpretation of the term "restriction" or the requirement for a complainant to demonstrate that a
challenged measure gives rise to a "restriction". Therefore, China argues, a complaining Member

135Working Rules on Issuing Export Licences, Minist ry of Commerce, Shangp eifa (2008) No. 398,
9 October 2008 (Panel Exhibits CHN-344 and JE-97).
136China's appellant's submission, para. 603 (referring to Panel Reports, paras. 7.921, 7.946, 7.948,
7.958, 8.5(b), 8.8, 8.12(b), 8.15, 8.19(b), and 8.22).
137China's appellant's submission, para. 539. (original emphasis)

must establish that the action reasonably foreseen or anticipated under the measure will, at least in
defined circumstances, give rise to a limiting effect or condition on the quantity of exports, and that
the mere possibility that action to be taken under the measure might be WTO-inconsistent is not
enough. China submits that a measure that ma ndates and, therefore, necessarily leads to
WTO-inconsistent conduct is "as such" WTO-inconsistent even if the measure affords an authority the
discretion to apply, or not to apply, the measur e. China, however, distinguishes such measures from
measures with uncertain meaning in domestic law th at can always be interpreted and applied in a
WTO-consistent manner. The theoretical possibility that the authority could exercise its discretion by
choosing a WTO-inconsistent meaning does not render the measure "as such" WTO-inconsistent.
60. Turning to the application of Article XI:1 of the GATT 1994 to Article 11(7) of the 2008
Export Licence Administration Measures and Articles 5(5) and 8(4) of the 2008 Export Licensing
Working Rules , China maintains that it was not sufficient for the Panel to rely on the theoretical
possibility for a Chinese licen se-issuing authority to exercise "ope n-ended discretion" by interpreting
and applying the measures in such a way as to impose a restriction on exports.
139 In China's view, its
authorities could always choose a WTO-consistent course of action by requiring documents that do
not entail a "restriction" on exportation. Where an authority enjoys "discretion" to interpret and apply
the licensing measures, in all in stances, in such a way that the required documents do not have a
"limiting effect" or impose a "limiting condition" on exports, the theoretical possibility that an
authority might exercise that discretion in a WTO-inconsistent manner does not constitute a
"restriction" under Article XI:1, absent eviden ce that the measure has been applied in a
WTO-inconsistent manner.
140
61. China further submits that the Panel erred under Article 11 of the DSU because it had no
evidentiary basis to find that the discretion to request additional documents would constitute a
prohibited "restriction" under Article XI:1. 141 In particular, China contends that there is no evidence
of any instance in which Chinese authorities "request ed the provision of an unspecified document that

141China's appellant's submission, p. 161, heading VIII.D.4. China includes a ground of appeal under
Article 11 of the DSU based on the Appellate Body's reco gnition "that it is often difficult to distinguish clearly
between issues that are purely legal or purely factual, or are mixed issues of law and fact", and that "a failure to
make a claim under Article 11 of the DSU on an issue that the Appellate B ody determines to concern a factual
assessment may have serious consequences for the appe llant". (China's appellant's submission, p. 161,
footnote 676 to heading VIII.D.4. (quoting Appellate Body Report, EC and certain member States – Large Civil
Aircraft, para. 872))

restricted exports".
142 China refers to evidence showing that export licences have always been granted
on the production of documents specified in China's licensing measures.
B. Arguments of the United States and Mexico – Joint Appellees
1. Article 6.2 of the DSU
62. The United States and Mexico contend that the Panel correctly found that Section III of the
complainants' panel requests complies with the requirements of Article 6.2 of the DSU. The
United States and Mexico request the Appellate Bo dy to uphold the Panel's finding in the Panel's
preliminary ruling (second phase) and in the Panel Reports that Section III of the panel requests
comply with Article 6.2 of the DSU, and to uphold all consequent findings of inconsistency.
143
63. The United States and Mexico disagree with China's contention that the Panel observed
defects in Section III of the panel requests. Rather, the fact that the Panel, in the preliminary ruling
(first phase), reserved its decision on China's objecti ons under Article 6.2 of the DSU demonstrates
that the Panel provisionally considered Section III of the panel requests to be sufficient to comply
with Article 6.2. The United States and Mexico find support for their contention in paragraphs 34
and 35 of the Panel's preliminary ruling (first phase) ; in particular, the Panel's statement that the
"narrative paragraphs aim at explaining succinctly how and why some of the challenged measures at
issue are inconsistent with some of the WTO principles". 144 Furthermore, the Panel's statement in
paragraph 46 of the Panel's prelimin ary ruling (first phase), where the Panel stated that it "reserves its
decision" on China's objections under Article 6.2 of the DSU, supports the proposition that the Panel
provisionally accepted that Section III of the panel requests comply with Article 6.2 of the DSU.
64. For the United States and Mexico, the only additi onal information the Panel needed in order
to make a definitive finding under Article 6.2 w as to determine, from the parties' first written
submissions, whether China had suffered any prejudice in its ability to defend itself. In addition, the
United States and Mexico take issue with China's contention that the Panel used the complainants'
later submissions to cure defects in Section III of the panel requests. The Panel questions following
the first and second Panel meetings requesting the co mplainants to list all measures and the specific

143In particular, paras. 7.669, 7.670, 7.678, 7.756, 7.807, 7.958, 7.1082, 7.1102, 7.1103, 8.4(a)-(b),
8.5(b), 8.6(a)-(b), 8.11 (a), (c), (e), and (f), 8.12(b), 8.13(a)-(b), 8.18(a)-(b), 8.19(b), and 8.20(a)-(b) of the Panel
Reports. (See joint appellees' submission of the United States and Mexico, para. 59)
144Joint appellees' submission of the United States and Mexico, para. 45 (quoting Panel's preliminary
ruling (first phase), Panel Reports, Annex F-1, para. 35). (emphasis added by the United States and Mexico
omitted)

WTO provisions each of the measures allegedly violate were not posed with any specific intentions
regarding Section III of the panel requests, but rath er in order to clarify what recommendations the
complainants were seeking with r espect to all the claims at issue in the dispute. Thus, the Panel
looked at the tables submitted by the complainants in order to confirm that China had not been
prejudiced in the preparation of its defence.
65. The United States and Mexico submit that Chin a mistakenly relies on the Appellate Body's
statement in US – Oil Country Tubular Goods Sunset Reviews that, in order to "present the problem
clearly", a complainant must "plainly connect" th e challenged measures with the provisions of the
covered agreements claimed to have been infringed.
145 In that dispute, the Appellate Body found that
Argentina's panel request satisfied the requirements of Article 6.2, even though the link between the
measures and the WTO obligations at issue was far less clear than in the panel requests at issue in the
current dispute. The United States and Mexico recall that they had identified before the Panel
37 panel requests from previous disputes that follow the structure of Section III of the panel requests
at issue in this dispute, and in none of th ose cases was the panel request found not to satisfy
Article 6.2 of the DSU. This demonstrates that Ch ina is advocating a "dramatically new approach to
the interpretation of Article 6.2".146
66. Finally, the United States and Mexico mainta in that the Panel respected the due process
requirements contained in Article 6.2 of the DS U. The Panel "took pains to assess whether the
argumentation advanced by the [c]omplainants resu lted in any prejudice to China's ability to defend
itself".147 Yet, China's argument that the complainants intended to advance "subsets of claims
regarding subsets of measures", as well as the argum ent that the total combination of measures and
legal provisions resulted in a large number of possibl e claims, demonstrate that China was more than
"adequately notified", and was in fact "well aware" , of the claims the complainants could advance. 148
The United States and Mexico add that Article 6. 2 of the DSU does not require that every claim
identified in a panel request be advanced.
2. The Panel's Recommendations
67. The United States and Mexico emphasize the limited scope of China's appeal, noting that
China appeals only the Panel's recommendations "to the extent that [the] recommendation[s] apply to

145Joint appellees' submission of the United States and Mexico, para. 48 (quoting Appellate Body
Report, US – Oil Country Tubular Goods Sunset Reviews, para. 162).
146Joint appellees' submission of the United States and Mexico, para. 54.
147Joint appellees' submission of the United States and Mexico, para. 55.
148Joint appellees' submission of the United States and Mexico, para. 57.

annual replacement measures", which China argues are outside the Panel's terms of reference.
149 The
Panel did not make recommendations on measures on which it had not made fi ndings, and it did not
make a recommendation on annual replacement measu res adopted after the establishment of the
Panel. Instead, the Panel made findings and r ecommendations on the series of measures "in force at
the date of panel establishment". 150 According to the United States and Mexico, China's appeal could
therefore "be dismissed on this basis alone".151
68. The United States and Mexico further disagree with China's apparent position that the only
way for them to challenge the future life of th e export duties and quotas at issue is by challenging
China's replacement measures. The United States and Mexico submit, however, that they do not have
to challenge and obtain findings and recommendations against "replacement measures" in order for
"future" measures to come within the scope of China's implementation obligation once the challenged
measures have been found to be WTO-inconsistent.152 China's approach would "frustrate the aims of
the dispute settlement system", as it would create the "moving target situation" against which the
Appellate Body has cautioned. 153 If no recommendations could be made in relation to an annual
measure once it had been superseded, then trade measures imposed through annually recurring legal
instruments could never be successfully challenged in WTO dispute settlement. In the present case,
the implication of China's position is that the DSB would be precluded from making any
recommendations because the 2010 replacement measur es will have ceased to exist before the DSB
could adopt the Panel's recommendations and rulings.
69. The United States and Mexico also fault China fo r confusing the distinction between the basis
on which a recommendation is made and the applica tion or effect of the recommendation once it has
been made. Contrary to China's assertion, they have not abandoned their right to obtain meaningful
recommendations from this dispute settlement procee ding. Instead, the United States and Mexico
assert that they have consistently sought recommend ations on the measures found to be inconsistent
as of the date of Panel establishment.

149Joint appellees' submission of the United States and Mexico, para. 80 (quoting China's appellant's
submission, para. 99).
150Joint appellees' submission of the United States and Mexico, para. 83 (quoting Panel Reports,
para. 7.33(e)).
151Joint appellees' submission of the United States and Mexico, para. 83.
152Joint appellees' submission of the United States and Mexico, para. 86.
153Joint appellees' submission of the United States and Mexico, para. 87.

3. Applicability of Article XX of the GATT 1994
70. The United States and Mexico request the Appellate Body to uphold the Panel's finding that
China may not rely upon the exceptions contained in Article XX of the GATT 1994 to justify an
inconsistency with its export duty commitments c ontained in Paragraph 11.3 of China's Accession
Protocol. Specifically, the Panel "correctly interpreted and applied" China's Accession Protocol based
on the text of Paragraph 11.3 and Article XX and the relevant context, in conformity with a "key
principle of treaty interpretation" contained in Article 31(1) of the Vienna Convention on the Law of
Treaties154 (the "Vienna Convention").155 Additionally, the Panel properly rejected China's arguments
that an inherent right to regulate trade "appli es above and beyond the exceptions provided for in
Paragraph 11.3".156
(a) Paragraph 11.3 of China's Accession Protocol
71. The United States and Mexico request the Appella te Body to uphold the Panel's interpretation
of the "plain meaning" of Paragra ph 11.3 of China's Accession Protocol. 157 China's argument that the
two exceptions in Paragraph 11.3—for Annex 6 to th e Protocol, and for taxes and charges applied in
conformity with Article VIII of the GATT 1994—"s omehow authorize" China to justify its export
duties in excess of the maximum levels contained in Annex 6, as well as export duties on products not
listed in Annex 6, "misconstrue[s] the relevance" of these two exceptions.158
72. Regarding China's argument that reference to "exceptional circumstances" in the Note to
Annex 6 to China's Accession Protocol allows Ch ina to justify under Article XX of the GATT 1994
export duties found to be inconsistent with Para graph 11.3 of the Protocol, the United States and
Mexico assert that there is "no textual basis" for such a conclusion. 159 The first sentence of the Note
makes clear that China committed not to impose export duties on the 84 products listed in Annex 6
above the maximum rates set out therein. The sec ond and third sentences of the Note also impose an
additional obligation upon China that, in the event that the applied rate for any of the 84 products
listed in Annex 6 is less than the maximum rate , China cannot raise the applied rate except in
"exceptional circumstances", and only after consulting with the affected Members. In the light of
China's acceptance of this additional obligation, the Note cannot be read as providing a basis for

154Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679.
155Joint appellees' submission of the United States and Mexico, para. 96.
156Joint appellees' submission of the United States and Mexico, para. 97.
157Joint appellees' submission of the United States and Mexico, para. 111.
158Joint appellees' submission of the United States and Mexico, para. 111.
159Joint appellees' submission of the United States and Mexico, para. 113.

China to impose export duties on the 84 products a bove the maximum rates specified in Annex 6.
The United States and Mexico further reject China' s argument that, because of the reference to
"exceptional circumstances" in the Note to Annex 6, there is a "substantive overlap" between the Note
and Article XX of the GATT 1994.
160 Instead, Annex 6 and Article XX only "overlap" to the extent
that each establishes "potential exceptions" to the commitments contained in Annex 6 regarding the
applied rates for the 84 products listed, and in the GATT 1994, respectively.161
73. The United States and Mexico further submit that the fact that Paragraph 11.3 of China's
Accession Protocol expressly refers to Article V III of the GATT 1994, but leaves out reference to
other provisions of the GATT 1994, indicates that WTO Members and China did not intend
Article XX to be available as an exception to just ify a violation of Paragraph 11.3. They disagree
with China's assumption that, if a tax or charge that would otherwise be inconsistent with Article VIII
met the conditions of Article XX, then it would be consistent with Article VIII. Instead, they consider
that conformity with the conditions of Article XX only means that Article VIII would not "prevent the
application" of that measure.162
(b) Context from the WTO Agreement
74. The United States and Mexico argue that the Panel did not rely solely on the inclusion of the
two specific exceptions in Paragraph 11.3 of China' s Accession Protocol to reach the conclusion that
Article XX of the GATT 1994 is not available in cases of violation of the obligations contained in
Paragraph 11.3. Instead, the Panel also consider ed other provisions of China's Accession Protocol
and China's Accession Working Party Report, notin g that, unlike Paragraph 11.3, such provisions
include general references to the WTO Agreement and the GATT 1994.
75. The United States and Mexico further argue that Paragraphs 5.1, 11.1, and 11.2 of China's
Accession Protocol, Paragraphs 155 and 156 of China's Accession Working Party Report, and
Article XX of the GATT 1994 support the Panel's findi ng that Article XX is not applicable in cases of
findings of inconsistency with the commitments c ontained in Paragraph 11.3 of China's Accession
Protocol. The Panel relied on China – Publications and Audiovisual Products , where the
Appellate Body interpreted the introductory clause of Paragraph 5.1 of China's Accession Protocol as
including a reference to Article XX of the GATT 1994; however, the "specific and circumscribed"
language of Paragraph 11.3 is "in sharp contrast" to that of Paragraph 5.1, because it "sets forth

160Joint appellees' submission of the United States and Mexico, para. 114.
161Joint appellees' submission of the United States and Mexico, para. 114.
162Joint appellees' submission of the United States and Mexico, para. 117.

particular commitments" and the two exceptions to those commitments, and includes no reference to
the GATT 1994, or to WTO obligations more generally.
163 The United States and Mexico argue that
China's interpretation of Paragr aph 11.3 would render the introducto ry language in Paragraph 5.1
"superfluous" and would therefore be "disfavo[u]red under a key tenet" of the customary rules of
treaty interpretation that meaning and effect be given to all the terms of a treaty.164
76. According to the United States and Mexico, the Panel was also "appropriately struck" by the
difference between the language of Paragraph 11.3 a nd that of Paragraphs 11.1 and 11.2 of China's
Accession Protocol. 165 Whereas Paragraphs 11.1 and 11.2 a ffirm China's obligation to apply or
administer certain measures "in conformity w ith the GATT 1994", Paragraph 11.3 establishes an
obligation with regard to export duties that is absent in the GATT 1994, and sets forth the specific
exceptions that apply to that obligation. 166 Similarly, the Panel properly found support for its
interpretation of Paragraph 11. 3 in Paragraphs 155 and 156 of China's Accession Working Party
Report. While the Panel acknowle dged that Paragraphs 155 and 156 ar e not a part of the "explicit
commitments" made by China, the Panel also prope rly viewed these paragraphs as providing relevant
context because, in those paragraphs, WTO Member s expressed concerns over taxes and charges that
China applied to exports, and expressed the view th at such taxes and charges should be eliminated
unless applied in conformity with Article VIII of the GATT 1994 or Annex 6 of the Draft Protocol.167
77. The United States and Mexico recall the Panel's reliance upon the text of Article XX of the
GATT 1994 as indicating that the Article XX exce ptions relate only to the GATT 1994, and the
Panel's observation that Article XX has been incor porated by reference into some other covered
agreements. No such reference is contained in Paragraph 11.3 of China' s Accession Protocol, and
China does not address the meaning of the phrase "this Agreement" in Article XX on appeal. In
concluding that Article XX does not apply to vi olations of the commitments contained in
Paragraph 11.3, the Panel correctly interpreted Pa ragraph 11.3 and the relevant provisions of the

163Joint appellees' submission of the United States and Mexico, para. 121.
164Joint appellees' submission of the United States and Mexico, para. 121 (referring to Appellate Body
Report, US – Gasoline, p. 25, DSR 1996:I, 3, at 23).
165Joint appellees' submission of the United States and Mexico, para. 122.
166Joint appellees' submission of the United States and Mexico, para. 123 (quoting Panel Reports,
para. 7.138).
167Joint appellees' submission of the United States and Mexico, para. 124 (referring to Panel Reports,
para. 7.145).

GATT 1994, China's Accession Protocol, and China' s Accession Working Party Report "in a
harmonious manner", giving effect to the text of each provision.
168
78. Next, the United States and Mexico assert that China's argument that the Panel erred in
"failing to conclude" that Paragraph 170 of Chin a's Accession Working Party Report means that the
exceptions under Article XX apply to violatio ns of China's export duty commitments under
Paragraph 11.3 of its Accession Protocol is "without merit". 169 Paragraph 169 of the Accession
Working Party Report shows that some Members were concerned about internal policies, especially
those of sub-national governments, imposing discrimin atory taxes and other charges that would affect
trade in goods. In Paragraph 170, China responded to this concern by confirming that its laws relating
to all fees, charges, or taxes levied on imports and exports would be in full conformity with WTO
obligations. The United States and Mexico argue that it is "untenable to be lieve" that Paragraph 170
reflects the negotiators' intent to apply Article XX to Paragraph 11.3 of China's Accession Protocol.170
They submit that China's arguments ignore the te xt of Paragraph 11.3, the context supplied by
Paragraphs 155, 156, and 159 of China's Accessi on Working Party Report, and Article XX of the
GATT 1994, and "misconstrue" 171 the Panel's analysis of Paragra ph 170. The Panel did not "simply
conclude" that Paragraph 170 applies to domestic ta xes, and not export duties; instead, it correctly
found that "Paragraph 170 'does not refer to China's specific obligations on export duties'".172
79. Finally, in response to China's argument that th e Panel failed to interpret Paragraph 11.3 in
the light of the preamble of the WTO Agreement , the United States and Mexico assert that the
preamble does not provide "a textual basis" for conc luding that Article XX applies to violations of
Paragraph 11.3, nor does it negate the text an d context demonstrating that Members intended
Article XX not to apply.173
(c) The Inherent Right to Regulate Trade
80. According to the United States and Mexico, China's arguments asserting that its inherent right
to regulate trade permits recourse to Article XX of the GATT 1994 for violations of Paragraph 11.3 of

168Joint appellees' submission of the United States and Mexico, para. 127.
169Joint appellees' submission of the United States and Mexico, para. 128.
170Joint appellees' submission of the United States and Mexico, para. 130.
171Joint appellees' submission of the United States and Mexico, para. 132.
172Joint appellees' submission of the United States and Mexico, para. 132 (quoting Panel Reports,
para. 7.141). (emphasis added by the United States and Mexico)
173Joint appellees' submission of the United States and Mexico, para. 136.

China's Accession Protocol "are flawed in several respects, and should be rejected".
174 They begin by
highlighting that, contrary to China's clai ms, the Panel "nowhere suggested" that the WTO Agreement
confers an inherent right to regulate trade, or th at Members "abandoned" their right to regulate trade
upon "entering" the WTO.175
81. The United States and Mexico argue that the Pane l's conclusion that China agreed to "specific
textual disciplines" on its ability to impose export duties is consistent with the text of Paragraph 11.3
and the "understanding" reflected in previous Appellate Body reports that, by joining the WTO,
Members agreed to disciplines on their right to regulate trade, as contained in the covered
agreements.
176 The Appellate Body report in China – Publications and Audiovisual Products
recognized that, because WTO Members have an inhere nt right to regulate trade, it was necessary to
agree on rules that constrain that right. The United States and Mexico also rely on the Appellate Body
report in Japan – Alcoholic Beverages II to argue that China's obligation to eliminate export duties
contained in Paragraph 11.3 of China's Accession Protocol is a "commitment" that conditions the
exercise of China's sovereignty in exchange for the benefits it derives as a Member of the WTO.177
82. Recalling China's argument that it is entitled to invoke Article XX exceptions for violations of
Paragraph 11.3 in the absence of "specific treaty la nguage", the United States and Mexico assert that
China's approach would render the introductory clause in Paragraph 5.1, and the language in
Paragraphs 11.1 and 11.2, "superfluous". 178 In fact, the Appellate Body's finding in China –
Publications and Audiovisual Products that Article XX is available fo r violations of Paragraph 5.1 of
China's Accession Protocol was "grounded" in the language of the provision and not a right to
regulate trade "in the abstract". 179 The language in Paragraph 11.3 is "in contrast" to the language in
the accession documents of other WTO Members with respect to their obligations on export duties. 180
China's "citation" to language in other agreements related to WTO Members' ability to regulate is
"similarly unavailing".181 Specifically, the agreements cited by China do not address the applicability
of Article XX exceptions to China's obligations under Paragraph 11.3, nor do they "inform an

174Joint appellees' submission of the United States and Mexico, para. 139.
175Joint appellees' submission of the United States and Mexico, para. 140.
176Joint appellees' submission of the United States and Mexico, para. 140.
177Joint appellees' submission of the United States and Mexico, paras. 143 and 144 (referring to
Appellate Body Report, Japan – Alcoholic Beverages II, p. 15, DSR 1996:I, 97, at 108).
178Joint appellees' submission of the United States and Mexico, para. 145.
179Joint appellees' submission of the United States and Mexico, para. 145 (referring to Appellate Body
Report, China – Publications and Audiovisual Products, paras. 219-228).
180Joint appellees' submission of the United States a nd Mexico, para. 145 (referring to, as example,
Report of the Working Party on the Accession of Ukraine to the World Trade Organization,
WT/ACC/UKR/152, paras. 512 and 540).
181Joint appellees' submission of the United States and Mexico, para. 146.

interpretation" of the text of Paragraph 11.3.
182 The United States and Mexico also highlight the
Panel's observation that the Agreement on Trade-Related Investment Measures (the
"TRIMs Agreement"), the TBT Agreement, the TRIPS Agreement, the GATS, and the SPS Agreement
either expressly incorporate the right to invoke Ar ticle XX exceptions or include their own exceptions
and flexibilities.
83. According to the United States and Mexico, China' s insistence that it is not advocating for the
right to ignore its WTO commitments because it still must comply with the requirements of
Article XX "does not address the relevant issue in this dispute".
183 China's arguments wrongly
assume that the exceptions in Article XX are the star ting point for an analysis of WTO-consistency.
Instead, the United States and Mexico argue that the starting point of the analysis is whether a
measure is consistent with a Member's WTO ob ligations, and if not, whether any applicable
exceptions apply. Moreover, China's argument that it is entitled to invoke Article XX in the case of
Paragraph 11.3 violations because it is the only WTO Member with export duty commitments "lacks a
textual basis".
184 The fact that a WTO Me mber has undertaken a specific commitment that not all
WTO Members have made is not a proper basis for fi nding that an exception is applicable to that
commitment.
84. The United States and Mexico assert that China's right to promote non-trade interests is not
"at risk" in this dispute. 185 Paragraph 11.3 does not prevent China from undertaking measures other
than export duties to promote legitimate public h ealth or conservation objectives, and China has a
number of "tools at its disposal" to pursue these ends. 186 Paragraph 11.3 of China's Accession
Protocol, however, contains specific commitments with respect to export duties and provides only two
"applicable" exceptions. "Neither an abstract right to regulate trade nor Article XX of the
GATT 1994 changes that fact."187
4. Article XI:2(a) of the GATT 1994
85. The United States and Mexico request the Appellate Body to uphold the Panel's finding that
China had not demonstrated that its export quota on refractory-grade bauxite is "temporarily" applied
to prevent or relieve a "critical shortage" within the meaning of Article XI:2(a) of the GATT 1994,

182Joint appellees' submission of the United States and Mexico, para. 146.
183Joint appellees' submission of the United States and Mexico, para. 147.
184Joint appellees' submission of the United States and Mexico, para. 148.
185Joint appellees' submission of the United States and Mexico, para. 149.
186Joint appellees' submission of the United States and Mexico, para. 150.
187Joint appellees' submission of the United States and Mexico, para. 150.

and to reject China's claim that the Panel failed to conduct an objective assess ment of the matter, as
required under Article 11 of the DSU.
86. With respect to China's arguments relating to th e interpretation of the term "temporarily", the
United States and Mexico disagree with China's a llegation that the Panel excluded from the scope of
Article XI:2(a) any "long-term" application of ex port restrictions. However, the Panel did not
interpret the term "temporarily" so as to impose an "absolute limit" on the time period in which an
export restraint may be imposed under Article XI:2(a ). In the United States and Mexico's view, the
Panel was appropriately sensitive to the contextu al relationship between the terms "temporarily
applied" and "critical shortages" when it found that Article XI:2(a) cannot be interpreted to permit the
long-term application of measures in the nature of China's export restrictions on refractory-grade
bauxite.
87. In response to China's allegation that the Pa nel erred in finding that Articles XI:2(a)
and XX(g) of the GATT 1994 are mutually exclusive, the United States and Mexico submit that China
misunderstands the Panel's analysis. The Panel did not find that Articles XI:2(a) and XX(g) can never
apply to the same measure. Rather, the Panel found that, under China's interpretation of
Article XI:2(a), pursuant to which a Member coul d impose an export restriction for the purpose of
addressing limited reserves of a natural resource, Articles XI:2(a) and XX(g) would be duplicative.
88. Regarding China's argument that the Panel erre d in its interpretation of the term "critical
shortages", the United States and Mexico disagree that the Panel erred in interpreting Article XI:2(a)
"to exclude shortages caused, in part, by the ex haustibility of the product subject to the export
restriction".
188 They submit that the existence of a limited amount of reserves constitutes only a
degree of shortage, and a mere degree of shortage does not constitute a "critical" shortage, which is
one rising to the level of a crisis. They also refer to a discussion in the negotiating history of
Article XI:2(a), during which, in response to a propo sal to omit the word "critical" in Article XI:2(a),
the representative from the United Kingdom stated that, "if you take out the word 'critical', almost any
product which is essential will be alleged to have a degree of shortage and could be brought within the
scope of this paragraph".
189 This suggests that a showing of fi nite availability is not sufficient to

188Joint appellees' submission of the United States and Mexico, para. 173 (quoting China's appellant's
submission, paras. 356, 363, and 367).
189Joint appellees' submission of the United States and Mexico, para. 176 (quoting United Nations
Economic and Social Council, Second Session of the Prep aratory Committee of the Un ited Nations Conference
of Trade and Employment, Verbatim Report, Fortieth Meeting of Commission "A" (1) (Articles 25 & 27, 26,
28 & 29), UN document E/PC/T/A/PV/40(1), 15 August 1947 (Panel Exhibit CHN-181), p. 6).

demonstrate a critical shortage. In addition, the United States and Mexico maintain that the Panel
properly reasoned that the concept of "temporarily" informs the concept of a "critical shortage".
89. The United States and Mexico disagree with Chin a's contention that the Panel's finding that
an export restriction applied to address the exhaus tibility of a resource cannot be temporarily applied
is contradictory to other findings by the Panel. In their view, i rrespective of whether a measure is
applied until the remaining reserves of the product ar e exhausted, or until technological advancements
slow the rate of exhaustion, the application of the export restriction is not "temporary", as, in either
case, it is not connected to the time period necessary to address the critical shortage, but rather to the
depletion of reserves. Additionally, the "hypotheti cal situation" in which technological advancements
may allow for a slower rate of exhaustion does not "negate" the evidence on record showing that
China intends to maintain its export quota to gu arantee a supply for its domestic industry until the
reserves are depleted.
190
90. As regards China's allegations, first, that the Pa nel acted inconsistently with Article 11 of the
DSU, the United States and Mexico submit that th e Panel fully engaged with China's arguments
regarding annual review. However, the Panel also had before it evidence that China has imposed an
export quota on refractory-grade bauxite since at least 2000, as well as indications that China intended
to maintain the restrictions until the exhaustion of the remaining reserves. Th erefore, irrespective of
China's arguments relating to the annual review of those measures, the Panel's finding that the
restriction is not applied "temporarily" is, in th e United States and Mexico's view, "well-founded". 191
Second, China alleges that the Panel employed intern ally inconsistent or incoherent reasoning when it
found that an export restriction imposed to address the exhaustibility of a natural resource could not
be temporarily applied, because, in China's view, that finding is inconsistent with other Panel findings
with respect to technological developments. The United States and Mexico contend that there is no
inconsistency in the Panel's finding. Whether a measure is applied un til remaining reserves are
exhausted or until technological de velopments slow the rate of e xhaustion, the application of the
export quota is not temporary. In either case, it is tied not to the time period needed to address a
"critical shortage", but rather to the depletion of finite reserves.

190Joint appellees' submission of the United States and Mexico, para. 190 (referring to China's opening
statement at second Panel meeting, paras. 143, 144, and 146-148; and Panel Reports, para. 7.344).
191Joint appellees' submission of the United States and Mexico, para. 185.

5. Article XX(g) of the GATT 1994
91. The United States and Mexico request the Appella te Body to uphold the Panel's interpretation
of the phrase "made effective in conjunction with " in Article XX(g) of the GATT 1994 as requiring
that the purpose of a challenged export restriction must be to ensure the effe ctiveness of restrictions
imposed on domestic production or c onsumption. In their view, th e Panel's interpretation is in
accordance with the ordinary meaning of the terms in Article XX(g) in their context and in the light of
the object and purpose of the GATT 1994. They distinguish from the present case the Appellate Body
reports in US – Gasoline and US – Shrimp on the basis that neither of those cases involved the
question of how the operation of the challenged measu re should be conjoined with the operation of
the domestic restrictions. In US – Gasoline , this was because the challenged measure affecting
imports was the same measure establishing the restri ctions on domestic produc tion or consumption.
In US – Shrimp , the conjunction of the operation of th e challenged measure with the domestic
regulation was found to "satisfy easily" the requirement of Article XX(g).
192
92. According to the United States and Mexico, th e only other time a respondent has asserted an
Article XX(g) defence where the challenged trade measure was distinct from the restrictions on
domestic production or consumption was in the GATT dispute in Canada – Herring and Salmon. The
United States and Mexico agree with the GATT panel that an export restriction can only be
considered to be made effective "in conjunction with " domestic restrictions "if it was primarily aimed
at rendering effective these restrictions".
193 In the present case, the Panel appropriately drew on that
GATT panel report to conclude that, in order to qualify as a conservation measure justified under
Article XX(g), China's export quota must not only be applied jointly with restrictions on domestic
production or consumption, but must also ensure the effectiveness of those domestic restrictions.
6. Prior Export Performance and Minimum Capital Requirements
93. The United States and Mexico argue that the Panel correctly found that the imposition of prior
export performance and minimum registered capital requi rements is inconsistent with China's trading
rights commitments under Paragraphs 83 and 84 of China's Accession Working Party Report. First,
they assert that Paragraphs 83 and 84 include specifi c commitments to elimin ate China's examination

192Joint appellees' submission of the United States and Mexico, para. 215 (referring to Appellate Body
Report, US – Gasoline , pp. 3-5, DSR 1996:I, 3, at 4-6; and Appellate Body Report, US – Shrimp ,
paras. 143-145).
193Joint appellees' submission of the United States and Mexico, para. 217 (quoting Panel Reports,
para. 7.395, in turn quoting GATT Panel Report, Canada – Herring and Salmon , para. 4.6 (original emphasis
omitted)).

and approval process, including prior export performance and minimum capital requirements that are
not found elsewhere in the WTO Agreement. Second, China's suggestion that the complainants need
to demonstrate the WTO-inconsistency of Chin a's prior export performan ce and minimum capital
requirements under other provisions of the WTO Agreement is without merit. The United States and
Mexico insist that China has obligations with resp ect to such requirements pursuant to Paragraph 5.1
of China's Accession Protocol and Paragraphs 83 an d 84 of China's Accession Working Party Report,
and that the requirements currently imposed with respect to export quota allocation are inconsistent
with China's obligations under these provisions.
94. The United States and Mexico also refute China's argument that the Import Licensing
Agreement and Article XIII of the GATT 1994 contemplat e the use of historical performance in
allocating quotas. They insist that neither provisi on can be read as overriding China's trading rights
obligations.
95. Finally, the United States and Mexico challe nge China's position that China is allowed to
maintain a minimum capital requirement for foreign- invested companies. Th ey note that China did
not present this argument to the Panel. Paragraphs 83(b), 83(d), 84(a), and 84(b) of China's Accession
Working Party Report show that there is no basis fo r concluding that China is permitted to maintain
an examination and approval system that applies onl y to foreign-invested enterprises; in fact, these
provisions provide the opposite.
7. China's Export Licensing Requirements and Article XI:1 of the GATT 1994
96. The United States and Mexico request the Appellate Body to uphold the Panel's finding that
Article 11(7) of China's 2008 Export Licence Administration Measures , and Articles 5(5) and 8(4) of
the 2008 Export Licensing Working Rules , are inconsistent with Article XI:1 of the GATT 1994. 194
The United States and Mexico also request the Appella te Body to reject China's claim that the Panel
erred under Article 11 of the DSU by finding that Ch ina's measures are inconsistent with Article XI:1
without a sufficient evidentiary basis. The Panel co rrectly interpreted and applied Article XI:1 of the
GATT 1994, and correctly found that the uncertainty and unpredictability inherent in China's export
licensing system constitute a restriction under that provision. The United States and Mexico thus
reject China's contention that, where an authority en joys the discretion always to interpret and apply a
challenged measure in a WTO-consistent manner, an examination of the design, structure, and

194Joint appellees' submission of the United States and Mexico, para. 255 (referring to Panel Reports,
paras. 7.921, 7.946, 7.948, 7.958, 8.5(b), 8.8, 8.12(b), 8.15, 8.19(b), and 8.22).

expected operation of the measure does not permit a panel to conclude that the measure mandates and,
if applied, necessarily leads to WTO-inconsistent conduct.
97. The United States and Mexico argue that the Pa nel's interpretation is consistent with the
ordinary meaning of the term "restriction", as interp reted by WTO panels. They refer to a statement
by the panel in Colombia – Ports of Entry that the term "restrictions" unde r Article XI:1 is "broad in
scope" and "can cover measures that negativel y affect competitive opportunities", including
"measures that create uncertainties and affect invest ment plans, restrict market access for imports, or
make importation prohibitively costly".
195 For the United States and Mexico, an interpretation of the
term "restriction" as including the lack of certain ty and predictability arising from a discretionary
export licensing system is also supported by the Appellate Body's interpretation in Chile – Price Band
System of the term "import restrictions" in the context of Article 4 and footnote 1 of the Agreement on
Agriculture.
98. Moreover, the United States and Mexico argue that China itself recognizes that "[t]he object
and purpose underlying Article XI:1 is to protect competitive opportunities for exports, rather than
trade flows."196 This assertion is at odds with China's argument that its export licensing system can be
considered inconsistent with Article XI:1 only if it restricts trade flows through the denial of export
licences. According to the United States and Mexico , the uncertainty and unpredictability inherent in
the discretion of Chinese authorities to require undefined or unspecified documents entails a
restriction on competitive opportunities even without the occurrence of actual denials of export
licences, and is therefore inconsistent with Article XI:1 of the GATT 1994.
99. The United States and Mexico request the Appella te Body to reject China's claim that the
Panel acted inconsistently with Article 11 of th e DSU in making findings regarding China's export
licensing system without an evidentiary basis. Th e United States and Mexico argue that, while China
alleges that the Panel lacked a su fficient evidentiary basis for its fi nding, it acknowledges at the same
time that "it is not necessary to provide evidence of the application of a measure in support of an
as such challenge".197

195Joint appellees' submission of the United States and Mexico, para. 270 (quoting Panel Report,
Colombia – Ports of Entry, para. 7.240; and referring to Panel Reports, para. 7.894).
196Joint appellees' submission of the United States and Mexico, para. 275 (quoting China's appellant's
submission, para. 548).
197Joint appellees' submission of the United States and Mexico, para. 281 (quoting China's appellant's
submission, para. 596 (original emphasis)).

C. Arguments of the European Union – Appellee
1. Article 6.2 of the DSU
100. The European Union requests the Appellate Body to uphold the Panel's findings in
paragraph 77 of its preliminary ruling (second phase), and in paragra ph 7.3(b) of the Panel Reports,
that Section III of the panel requests complies with Article 6.2 of the DSU, and to uphold all of the
Panel's consequent findings of inconsistency.198 The European Union contends that the Panel did not
err under Article 6.2 of the DSU by finding that Section III of the panel requests presents the problem
clearly.
101. In response to China's contention that the Pane l observed defects in Section III of the panel
requests, the European Union asserts that the Pane l never found that the complainants' panel requests
were defective. The European Union submits that , although the Panel observed that the complainants
had not directly addressed in their submissions or in their subsequent oral statements the question of
whether Section III of the panel requests was consiste nt with the requirements of Article 6.2 of the
DSU, it "was not pointing to a 'defective' Panel Request".199
102. The European Union also disag rees with China's contention that the Panel found that the
complainants' responses to Panel Question 2 following the second Panel meeting corrected the defects
in the panel requests. For the European Union, the replies given by the complainants to Panel
Question 2 were merely a summary of the claims that had already been presented in more detail in the
complainants' first written submissions.
103. The European Union further contends that its first written submission was sufficiently clear as
to which Chinese measures were in violation of wh ich WTO obligations. In the European Union's
view, the scope of this dispute was therefore established early on in the proceedings.
104. Furthermore, in response to China's submi ssion that it attaches great importance to the
paramount principle that deficiencies in a panel request cannot be cured by a party's subsequent
submissions, the European Union argues that this statement would only be relevant if the panel

198In particular, the findings in paragraphs 7.669, 7.670, 7.678, 7.756, 7.807, 7.958, 7.1082, 7.1102,
7.1103, 8.4(a)-(b), 8.5(b), 8.6(a)-(b), 8.11 (a), (b), (e) an d (f), 8.12(b), 8.13(a)-(b), 8.18(a)-(b), 8.19(b), and
8.20(a)-(b) of the Panel Reports. (See European Union's appellee's submission, para. 4)
199European Union's appellee's submission, para. 15.

requests were in fact "defective", which, accordin g to the European Uni on is not the case in the
present dispute.
200
105. Finally, in response to China's assertion that the Panel erred by frustrating China's due process
rights under Article 6.2 of the DSU, the European Un ion contends that the fact that China defended,
already in its first written submission, all the clai ms made by the complainants demonstrates that
China had the opportunity to prepare exhaustively its defence in the earliest stages of the Panel
proceedings. Finally, the European Union also di sagrees with China that the Panel had allowed the
complainants a "'long à la carte menu' from which they could choose in subsequent submissions …
the 'specific combination of measures and claims'". 201 The European Union asse rts that, contrary to
what China suggests, the European Union had "no c hoice at all" as regards the specific combinations
of measures and claims at issue.202
2. The Panel's Recommendations
106. With regard to China's appeal of the Panel's recommendations, the European Union points out
that the Panel made recommendations "on the 'ser ies of measures', which comprise the 'relevant
framework legislation, the implementing regulation(s), other applicable laws and the specific measure
imposing export duties or export quotas in force at the date of the Panel's establishment '".203 T h e
European Union recalls that the Panel was estab lished on 21 December 2009 and, on that date, the
2010 "replacement measures" to which Chin a refers in its appeal were not " in force": they entered
into force on 1 January 2010. 204 The European Union considers, therefore, that the Panel did not
make recommendations that apply to 2010 replace ment measures and China's appeal should be
rejected "as baseless".205
107. Referring to China's concern that the Panel's recommendations may "require China to take
action to revise" its "annual replacement measures" 206, the European Union argues that the
Appellate Body is not the "proper forum" to determ ine actions China should take to comply with its

200European Union's appellee's submission, para. 22.
201European Union's appellee's submission, para. 26 (quoting China's appellant's submission, para. 96).
(emphasis added by the European Union omitted)
202European Union's appellee's submission, para. 27.
203European Union's appellee's submission, para. 40 (quoting Panel Reports, para. 7.33(e)). (emphasis
added by the European Union)
204European Union's appellee's submission, para. 40 (referring to Panel Reports, para. 7.32). (emphasis
added by the European Union)
205European Union's appellee's submission, para. 41.
206European Union's appellee's submission, para. 43 (referring to China's appellant's submission,
para. 100).

WTO obligations. Instead, Article 21 of the DSU provides the proper procedure that China should
follow in order to identify these acti ons. For the European Union, th is is another reason why China's
appeal of the Panel's recommendations should be rejected.
3. Applicability of Article XX of the GATT 1994
108. The European Union requests the Appellate Body to uphold the Panel's findings and
conclusions that China cannot invoke the defence of Article XX of the GATT 1994 for violations of
the obligations contained in Pa ragraph 11.3 of China's Accession Protocol. While WTO Members
can "incorporate" Article XX of the GATT 1994 into another agreement if they so wish, the legal
basis for "applying" Article XX to another agreemen t would be the "very text of incorporation", and
not Article XX itself, as Article XX is limited by its "express terms" to the GATT 1994. 207 T h e
European Union also asserts that the Panel was corr ect in finding that "China had 'exercised its
inherent and sovereign right to regulate trade in negotiating, among other actions, the terms of its
accession into the WTO'", and that the inherent ri ght to regulate trade does not permit recourse to
Article XX.208
(a) Paragraph 11.3 of China's Accession Protocol
109. The European Union disagrees with China's asser tion that "the exception to [P]aragraph 11.3
in Annex 6 to China's Accession Protocol estab lishes a connection with Article XX of the
GATT 1994".209 The "fundamental flaw" with this argument is that it is based on the premise that the
use of the term "exceptional circumstances" in the text of the Note to Annex 6 establishes a
"substantive overlap" with Article XX, which is entitled "General Exceptions". 210 Specifically,
China's argument is flawed because it compares the term "exceptional circumstances" to "exceptions".
The European Union notes that that there is no "a greed definition or interpretation" of the phrase
"exceptional circumstances" in the Note to Annex 6 of China's Accession Protocol, and highlights the
fact that the word "exceptional" in the Note to Annex 6 is used as an adjective and not as a noun as in
Article XX. 211 Since an "exceptional circumstance" does not have the same meaning as an
"exception" within the meaning of Article XX, Chin a's argument takes the word "exceptional" out of
context.212 The European Union faults China for sear ching "for similar words or phrases in other

207European Union's appellee's submission, para. 54.
208European Union's appellee's submission, para. 55 (referring to Panel Reports, paras. 7.155-7.157).
209European Union's appellee's submission, paras. 59.
210European Union's appellee's submission, para. 62.
211European Union's appellee's submission, para. 62.
212European Union's appellee's submission, para. 63.

WTO agreements" in order to make them appli cable to Paragraph 11.3 of China's Accession
Protocol.
213
110. The European Union further submits that China disregards the Panel's reasoning regarding the
"fundamental difference"214 between Paragraph 11.3 and Paragraph 5.1 of China's Accession Protocol,
violations of which the Appellate Body has foun d can be justified under Article XX. That is,
Paragraph 11.3 does not contain the introductory phrase "[w]ithout prejudice to China's rights to
regulate trade in a manner consistent with the WTO Agreement" found in Paragraph 5.1.
111. The European Union also rejects China's argumen t that the reference to Article VIII of the
GATT 1994 in Paragraph 11.3 of China's Accession Protocol confirms the "common intent" 215 of
WTO Members to make Article XX applicable to Paragraph 11.3 as "pure conjecture". 216 T o t h e
contrary, the fact that there is a specific referenc e to Article VIII, but not to Article XX, indicates a
common intent to exclude the applicability of Artic le XX. The European Union adds that it is
"obscure from a systemic point of view" how the "express reference" to Article VIII could include a
"tacit reference" to the availability of Article XX of the GATT 1994.217
(b) Context from the WTO Agreement
112. In response to China's argument that Paragr aph 170 of China's Accession Working Party
Report justifies recourse to the exceptions contai ned in Article XX of the GATT 1994, although the
European Union agrees that Paragraph 170 is integr ated into China's Accession Protocol, it asserts
that this fact does not make Article XX applicable to Paragraph 11.3 of China's Accession Protocol.
Recalling China's argument that Paragraph 11.3 and Paragraph 170 overlap in terms of their subject
matter, the European Union asserts that the Pane l correctly identified the differences between
Paragraph 170 and Paragraph 11.3. Regarding China's argument that the Panel erred in "assum[ing]"
that Paragraph 170 does not apply to export du ties because Paragraphs 155 and 156 of China's
Accession Working Party Report apply to export du ties, the European Union notes that the Panel
recognized the importance of Paragraphs 155 an d 156 as providing the context for interpreting
Paragraph 170 of the Accessi on Working Party Report. 218 The European Union also highlights that

213European Union's appellee's submission, para. 64.
214European Union's appellee's submission, para. 70.
215European Union's appellee's submission, para. 75 (referring to China's appellant's submission,
para. 226).
216European Union's appellee's submission, para. 77.
217European Union's appellee's submission, para. 78.
218European Union's appellee's submission, para. 85 (referring to Panel Reports, para. 7.145).

the Panel noted that Paragraphs 155 and 156 fall under section C of China's Accession Working Party
Report entitled "Export Regulations", whereas Paragr aph 170 falls under section D, entitled "Internal
Policies Affecting Foreign Trade in Goods".
113. According to the European Union, China's argument that "the Panel appeared to consider that
Paragraph 170 imposes obligations solely under the GATT 1994"
219 attempts to "distort" what the
Panel had "actually stated" 220: that Paragraph 11.3 of China's Accession Protocol includes an
obligation to eliminate export duties that is not found in the GATT 1994, whereas "Paragraph 170
essentially repeats the commitments existing under certain GATT rules".221
114. In response to China's argum ent that context from the WTO Agreement confirms the
applicability of Article XX of the GATT 1994 as a justification for inconsistencies with
Paragraph 11.3 of China's Accession Protocol, th e European Union begins by noting that, under
Article 31(1) of the Vienna Convention, context can only confirm the ordinary meaning given to the
terms of the agreement, and since China has failed to show that the ordinary meaning establishes the
applicability of Article XX to Paragraph 11.3, context alone cannot serve as the "constitutive
element".222 The European Union asserts that, although the preamble of the WTO Agreement contains
elements such as general principles underlying the creation of the WTO, objectives of the multilateral
trading system, and common expectations of Members, which may be relevant when assessing
Article XX of the GATT 1994, the preamble can not make Article XX applicable to specific
obligations in a WTO legal instrument in the absence of a reference to Article XX in that instrument.
(c) The Inherent Right to Regulate Trade
115. The European Union disagrees w ith China that the Panel erred in its interpretation of
Paragraph 11.3 of China's Accession Protocol by no t recognizing China's inherent right to regulate
trade. The European Union points out that the Pane l recognized that this sovereign and inherent right
is held by all WTO Members and reasoned that Ch ina had exercised this right when negotiating its
accession to the WTO. The European Union agrees with the Panel that the provisions of the covered

219European Union's appellee's submission, para. 87 (quoting China's appellant's submission,
para. 242).
220European Union's appellee's submission, para. 88.
222European Union's appellee's submission, para. 97.

agreements and China's Accession Protocol therefore "delineate" China's exercise of its inherent and
sovereign right to regulate trade.
223
4. Article XI:2(a) of the GATT 1994
116. The European Union requests the Appellate Body to reject China's appeal and also to reject
China's claims that the Panel failed to conduct an objective assessment of the matter, as required
under Article 11 of the DSU. With respect to the Pa nel's interpretation of the term "temporarily" in
Article XI:2(a) of the GATT 1994, China misunderstands the Panel's statements that Article XI:2(a)
should not be interpreted to permit the "long-term application of conservation measures", or "long-
term measures related to conservation purposes". 224 For the European Union, these statements do not
mean that the Panel found that Article XI:2(a) do es not cover any "long-term" export restrictions, but
rather that Article XI:2(a) does not cover any "long-term conservation measures".225
117. Further, the European Union takes issue with China's assertion that the annual renewal of
China's export restrictions means that the restricti ons have a relatively short duration of one year and
that their duration is defined in relation to the time required to prevent or relieve the critical shortage.
In the European Union's view, the annual renewal of China's measures implies that, at the beginning
of each year, China expects that the shortage of refractory-grade bauxite will cease by the end of the
year, but at year-end, China realizes that this expect ation was incorrect and adapts its expectation that
the shortage will cease one year later, and so on, until final depletion of the reserves. For the
European Union, this indicates that China's annual renewal of export restrictions does not have any
impact on whether the restrictions are applied "temporarily".
118. The European Union also takes issue with China's contention that the Panel found that
Article XI:2(a) and Article XX(g) of the GATT 1994 are mutually exclusive. The European Union
maintains that the Panel did not make such a findi ng, but instead used a comparison between the two
Articles only to draw additional support for its interpre tation. On the basis of that analysis, the Panel
rightly concluded that Article XX(g) is confined to conservation measures, while Article XI:2(a)
covers "exceptional measures" that address situations of crisis.226
119. With respect to the Panel's interpretation of th e term "critical shortages", the European Union
submits that the Panel found that Article XI:2(a) does not cover all types of critical shortages, but

223European Union's appellee's submission, para. 109.
225European Union's appellee's submission, para. 175. (original emphasis)

deals only with a subset, namely those critical shor tages that are "capable of being 'prevented or
relieved' through the 'temporary app lication' of export restrictions".
227 Thus, a "critical shortage" is
capable of being prevented or relieved through an export restriction that is "temporarily applied", only
if the critical shortage itself is "temporary".
120. The European Union takes issue with Chin a's allegation that the Panel found that
"conservation measures" can never fall within the scope of Article XI:2(a) and contends that, rather,
the Panel found that China's export quota on refractory-grade bauxite is not covered by
Article XI:2(a). The European Union submits that the purpose of the export quota, as acknowledged
by China, was not to "prevent" or "relieve" a critical shortage, but to "extend the reserves" for "current
and future generations".
228 The limited life span of the reserves of a good, however, is not sufficient
for a finding of a "critical shortage" in the sense of Article XI:2(a). In the European Union's view,
Article XI:2(a) covers export restric tions that act as a "bridge" until a crisis is resolved and normality
returns. In that sense, the gradual depletion of natural resources may well create a shortage in the
availability of a good, however, such shortage do es not fall within the scope of Article XI:2(a),
because it is not "temporary". 229 Absent extraordinary circum stances, such as an unexpected
discovery of new reserves, there is no point in tim e where it could reasonably be expected that the
shortage would cease to exist and the availability of the good would return to normal conditions. The
European Union submits that "a shortage cau sed by the limited natural reserves of the good is the
normal condition for the availability of the good".230
121. For the European Union, a shortage caused by the depletion of natural resources is different
from the "critical shortage" occurring in situations of crisis. The former can be addressed by
conservation measures seeking to extend the duration of the resources. The latter can be addressed by
temporary measures seeking to prevent or relieve the e ffects of a crisis. For the European Union, the
text of Article XI:2(a) covers only the latter situa tion. This does not mean that Article XI:2(a) can
never cover goods with a limited reserve. The European Union gives the example of a mining
accident, which would cause a severe decrease in the quantity of refractory-grad e bauxite in China.
The ensuing shortage of the good could fall within the scope of Article XI:2(a) because it would be

227European Union's appellee's submission, para. 135.
228European Union's appellee's submission, para. 147.
229European Union's appellee's submission, para. 150.
230European Union's appellee's submission, para. 150. (original emphasis)

capable of being relieved through measures applied fo r the time needed to bring the mine back to
operation, and the market conditions back to their "'normal', gradually depleting situation".
231
122. Finally, in response to China's allegation that the Panel erred under Article 11 of the DSU
because it failed to assess properly evidence that China's export restrictions are annually reviewed and
renewed, the European Union contends that the a bove considerations relating to China's review and
renewal mechanism support the Panel's finding that a withdrawal of the restrictions is not to be
expected until the depletion of the reserves, and th at this finding was based on accurate findings of
fact. The European Union also objects to China's allegation that the Panel found that there was no
possibility for an existing shortage of an exhaustible natural resource to cease to exist, and that the
Panel thereby acted inconsistently with Article 11 of the DSU. The European Union contends that the
Panel did not make such a finding. Instead, the Pane l relied on the fact that the restriction had been in
place "for at least a decade" and that there was no indication that it would be lifted.
5. Article XX(g) of the GATT 1994
123. The European Union requests the Appellate Body to uphold the Panel's interpretation of the
phrase "made effective in conjunction with" in Article XX(g) of the GATT 1994. The
European Union takes issue with China's allega tion that the Panel found that a restriction on
international trade must pursue a dual purpose of conserving a natural resource and of seeking to
ensure the effectiveness of domestic restrictions on th at resource. For the European Union, the Panel
referred only to one and the same purpose, namely th e conservation of a natural resource, for both the
restriction on international trade and the restrictions on domestic production or consumption.
124. Furthermore, the European Union argues that th e word "purpose" in paragraph 7.397 of the
Panel Reports closely reflects the language used in paragraph 4.6 of the GATT panel report in
Canada – Herring and Salmon , which rightly stated that a measure "can only be made [effective] 'in
conjunction' with domestic restrictions on production, if it is primarily aimed at rendering effective
these restrictions". 232 The European Union further submits that the domestic restrictions on
production or consumption must, by their very nature , have the purpose or aim of conserving natural
resources. It would be difficult to imagine a situation in which a domestic restriction on the

231European Union's appellee's submission, para. 154.
232European Union's appellee's submission, para. 195 (quoting GATT Panel Report, Canada – Herring
and Salmon, para. 4.6). (emphasis added by the European Union omitted)

production or consumption of a natu ral resource would have a "purpose" other than conservation of
the same natural resource.
233
6. Prior Export Performance and Minimum Capital Requirements
125. As a preliminary matter, the European Un ion argues that China's appeal concerning
examination and approval systems for WTO-consistent export quotas is "ineffective" since China has
not appealed the Panel's finding that the e xport quotas are inconsistent with the GATT 1994. 234 The
European Union, therefore, questions whether th e Appellate Body should rule on China's appeal
regarding China's prior export performance and minimum capital requirements.235
126. In any event, the European Uni on considers that the Panel corre ctly found that China's prior
export performance and minimum capital requireme nts imposed on exporters of bauxite, coke,
fluorspar, and silicon carbide are inconsistent with China's obligations under Paragraph 5.1 of its
Accession Protocol and Paragra phs 83 and 84 of China's Accession Working Party Report. The
European Union submits that these provisions require that China: (i) eliminate its system of
examination and approval of trading rights; (ii) grant the right to trade to all Chinese enterprises (both
Chinese-invested and foreign-invested) and to all foreign enterprises and individuals; and
(iii) eliminate the "minimum capital" and the "prior experience" requirements for foreign enterprises,
after the end of the phase-in period.
236
127. The European Union further notes that China seek s to justify the continued use of its prior
export performance and minimum capital requirements on the basis of its alleged right to adopt WTO-
consistent "quota allocating criteria", its need to "a llocate the quota through criteria that restrict the
volume of exports to quota volume" 237, its right to "maintain quota allocation rules" 238, and its right to
"establish quota allocation rules". 239 Yet, China's prior export performance and minimum capital
requirements are not "export quota allocation criteria" or part of an "export quota allocation system".
Rather, China uses these requirements only at the stage of prior examination and approval. The

233European Union's appellee's submission, para. 201.
234European Union's appellee's submission, para. 214.
235European Union's appellee's submission, para. 216.
236European Union's appellee's submission, para. 224.
237European Union's appellee's submission, para. 231 (referring to China's appellant's submission,
para. 443).
238European Union's appellee's submission, para. 231 (referring to China's appellant's submission,
para. 444).
239European Union's appellee's submission, para. 231 (referring to China's appellant's submission,
para. 568).

European Union considers that this is an additi onal reason for which this aspect of China's appeal
should be dismissed.
128. The European Union further argues that allowi ng China to treat Chinese-invested enterprises
differently from foreign-invested enterprises woul d be contrary to the general structure of the
obligations undertaken by China in Paragraphs 83 and 84 of its Accession Working Party Report.
7. China's "Operation Capacity" Criterion and Article X:3(a) of the GATT 1994
129. The European Union requests the Appellate Body to uphold the Panel's finding that China's
allocation of export quotas through the use of the " operation capacity" criterion is inconsistent with
Article X:3(a) of the GATT 1994, and to reject Chin a's claim that the Panel act ed inconsistently with
Article 11 of the DSU. The European Union disagrees with China's contention that, in the light of the
absence of evidence demonstra ting WTO-inconsistent applica tion, China was entitled to the
presumption that it would act in accordance with its WTO obligations. The European Union contends
that the Panel found that there are 32 different lo cal departments in China interpreting and applying
the "operation capacity" criterion, and that Chinese legislation does not define the notion of "operation
capacity" or offer any standard on the basis of which the local departments should assess that
criterion. For the European Union, it is theref ore difficult to see how China's 32 local departments
can always interpret and apply the "operation capacity " criterion in the same way, as a result of their
own choice. Rather, the logical conclusion would se em to be that, if the 32 local departments ever
interpret and apply this in the same way, this would be sheer coincidence.
130. The European Union also takes issue with China's argument that , where an authority is faced
with a domestic measure of uncertain meaning, the theoretical risk that th e authority might choose a
WTO-inconsistent meaning does not render the meas ure "as such" WTO-inconsistent. The Panel did
not find that the "operation capacity" criterion was "a s such" WTO-inconsistent. Rather, it found that
China's administration of its direct allocation of export quotas is inconsistent with Article X:3(a).
131. In the European Union's view, China attempts to draw an artificial distinction between types
of certainty so as to distinguish the facts of the present case from the facts in Argentina – Hides and
Leather. Yet, just as the facts in the present ca se create a "very real risk" of administration
inconsistent with Article X:3(a)240, the panel in Argentina – Hides and Leather found that the risk that
information might be improperly used was sufficient to lead to a finding of unreasonable and partial

240European Union's appellee's submission, para. 319.

administration.
241 The European Union argues therefore that the analysis and findings by the panel in
Argentina – Hides and Leather support the Panel's analysis and findings in this case.
132. The European Union stresses that the Panel co rrectly found China's administration of its
direct allocation of export quotas to be inconsistent with Article X:3(a) on the basis that the "operation
capacity" criterion could not be applied "'consiste ntly in the same manner, both over time and in
different places' and 'in respect of all traders'" 242, and that the Panel did not find that the "operation
capacity" criterion was per se inconsistent. 243 In other words, contrary to what China asserts, the
Panel did not find that a theoretical risk that th e Chinese authorities may exercise their discretion to
adopt a WTO-inconsistent meaning for the term "operation capacity" thereby renders the measure
"as such" WTO-inconsistent.244
133. The European Union also disagrees with China's assertion that there is no evidence to support
the Panel's assessment regarding the likelihood of the risk of inconsistent administration as being
"very real". 245 The Panel's findings that the risk is "v ery real" were supported by the "undisputed
fact[]" that there is "no definition, standard or guidelines" for the 32 local departments charged with
interpreting and applying the "operation capacity" criterion. 246 The European Union therefore
requests that the Appellate Body reject China's assertion that the Panel acted inconsistently with
Article 11 of the DSU in its analysis of this issue.
8. China's Export Licensing Requirements and Article XI:1 of the GATT 1994
134. The European Union requests the Appellate Body to uphold the Panel's finding that
Article 11(7) of the 2008 Export Licence Administration Measures , and Articles 5(5) and 8(4) of the
2008 Export Licensing Working Rules are inconsistent with Article XI:1 of the GATT 1994. 247 The
European Union also requests the Appellate Body to reject China's claim that the Panel erred under
Article 11 of the DSU by making this finding without a sufficient evidentiary basis. The
European Union disagrees with China's argume nt that allowing export licensing agencies the

241European Union's appellee's submission, para. 318 (referring to Panel Report, Argentina – Hides and
Leather, para. 11.92).
243European Union's appellee's submission, para. 309.
244European Union's appellee's submission, para. 307.
245European Union's appellee's submission, para. 326.
246European Union's appellee's submission, para. 327.
247European Union's appellee's submission, para. 285.

"discretion" to grant or refuse export licences is not inconsistent with Article XI:1 of the
GATT 1994.
248
135. The European Union takes issue with China's distinction between discretion to apply or not a
domestic legal provision that mandates WTO-inc onsistent action, and discretion to apply an
ambiguous provision in a WTO-consistent manner. The European Union argues that such a
distinction makes little difference to individual economic operators and other WTO Members.
China's interpretation would contradict the purpose of Article XI:1, which is "to protect traders and
create the predictability needed to plan future trade".
249 The European Union contends that both types
of "discretion" create uncertainty which, in turn, "leads to increased transaction costs and has negative
economic impact".250
136. The European Union submits that China's position is inconsistent with the interpretation of
Article XI:1 of the GATT 1994 given by WTO pane ls. The discretion accord ed to Chinese licensing
authorities in this case to require undefined documents resembles the discretion enjoyed by the Indian
licensing authorities when granting licences on the basis of unspecified "merits", which the panel in
India – Quantitative Restrictions found to be inconsistent with Article XI:1.251
137. The European Union further disagrees with China's assertion that, where there is an
"ambiguous" domestic measure that can always be interpreted and applied in a WTO-consistent
manner, it must be presumed that the respondent w ill abide by its WTO obligations in applying such
measure. The "ambiguous" domestic measure could also always be interpreted and applied in a
WTO-inconsistent manner. For the European Union, Article XI:1 protects the rights of traders and
other WTO Members and "does not create 'presumptions of WTO consistency'" for responding
parties.252
138. The European Union also rejects China's asserti on that the Panel acted inconsistently with
Article 11 of the DSU by making findings under Artic le XI:1 of the GATT 1994 without a sufficient
evidentiary basis. Contrary to what China argu es, the Panel did not simply presume "that Chinese
license-issuing authorities will one day choose to request additional documents of such a nature so as

248European Union's appellee's submission, para. 253 (referring to China's appellant's submission,
paras. 569, 580, and 582).
249European Union's appellee's submission, para. 260 (referring to Panel Report, US – Section 301
Trade Act, para. 7.84). (emphasis added by the European Union)
250European Union's appellee's submission, para. 260 (referring to Panel Report, US – Section 301
Trade Act, para. 7.84).
251European Union's appellee's submission, para. 263 (referring to Panel Reports, para. 7.920).
252European Union's appellee's submission, para. 266.

to impose a 'restriction' on export[s]".
253 Instead, based on its understanding of the relevant legal
provisions, the Panel found that the very existence of China's authorities' discretion to require
undefined and unspecific documents "created uncertain ty as to an applicant's ability to obtain an
export licence", and was therefore inconsis tent with Article XI:1 of the GATT 1994.
254 T h e
European Union argues that the text of China's re levant measures "was the proper 'evidentiary basis'"
for the Panel's finding, and that China's assertion that its authorities had never rejected any export
license application relating to manganese and zinc was not relevant for the Panel's analysis.255
D. Claims of Error by the United States – Other Appellant
1. Conditional Appeal regarding the Panel's Recommendations
139. The United States and Mexico assert that the out come of the Panel's approach to making
findings and recommendations in this dispute is consistent with the covered agreements and supported
by the record in this dispute. Specifically, the Panel properly concluded th at it would make findings
and recommendations on the measures operating together (the "series of measures") to impose export
duties or export quotas on the raw materials at issue. 256 The United States and Mexico request the
Appellate Body to review the Panel's recommendati ons on the export quota and export duty measures
only in the event that, pursuant to China's ap peal, the Appellate Body reverses the Panel's
recommendations in paragraphs 8. 8, 8.15, and 8.22 of the Panel Reports and finds that no
recommendation should have been made by the Pane l on the "series of meas ures" as they existed
when the Panel was established.
140. The United States and Mexico submit that the complainants challenged a number of export
restraints in a "logical way" that reflected the struct ure of the legal instruments that give effect to the
challenged export duties and export quotas. 257 In addition to seeking findings that the measures at
issue were inconsistent with WTO rules, the co mplainants sought recommendations with respect to
these measures that would ensure that the export duti es and quotas at issue would be within the scope
of any future compliance proceedings under Article 21. 5 of the DSU. According to the United States

253European Union's appellee's submission, para. 280 (quoting China's appellant's submission,
para. 599).
255European Union's appellee's submission, para. 283. The European Union further contends that
China's assertion in this respect wa s not proved during the Panel proceeding s, because the complainants did not
have access to the relevant information in order to corroborate or challenge it.
256United States' other appellant's submission, para. 38 (referring to Panel Reports, paras. 7.17, 7.33,
7.60-7.68, 7.76, 7.80, 7.83, 7.86, 7.89, 7.94, 7.97, and 7.218-7.224).
257United States' other appellant's submission, para. 41.

and Mexico, the adoption of a recommendation by the DSB was a "critical objective" in achieving a
"positive solution to the dispute", in terms of Article 3.7 of the DSU.
258
141. The United States and Mexico highlight that, du ring the Panel proceedings, China tried to
avoid responsibility for the challenged trade barriers by asking the Panel to "shift the focus" of its
review from the measures as they existed at the time of the establishment of the Panel to later points
in time. 259 By contrast, the complainants asked the Panel to focus its review on the challenged
measures in effect at the time of its establishmen t, because focusing on the legal situation at a later
time would be tantamount to permitting China to "move the target" and "shield important parts of the
export restraint regimes" from scrutiny.260 The United States and Mexico request the Appellate Body
to make a recommendation that "clearly is aime d at securing a positive resolution to this ongoing
dispute", as only such a resolution would preven t an "endless loop of WTO dispute settlement
proceedings".261
142. In the event that the Appellate Body finds th at no recommendation should have been made by
the Panel on the "series of measures" as they existe d at the time of Panel establishment, and reverses
the Panel's recommendations with respect to the re placement measures, the United States and Mexico
assert that the Panel erred under Articles 6.2, 7.1, 11, and 19.1 of the DSU in not making
recommendations on the 2009 export duty and export quota measures that were annually recurring
and in effect on the date of Panel establishment. The United States and Mexico note that it is
"undisputed" that the Panel correctly found that th ese measures, which were annually recurring and in
existence at the time the Panel was established but were subsequently supe rseded by other legal
instruments, were inconsistent with China's obligations under Article XI:1 of the GATT 1994 and
Paragraph 11.3 of China's Accession Protocol. However, in the light of Article 19.1 of the DSU and
the circumstances of this dispute where recurrence of a violation is likely, the Panel erred in not
making a recommendation on the basis of its finding th at, on the date the Panel was established, those
measures were inconsistent with China's WTO obl igations. According to the United States and

258United States' other appellant's submission, para. 42.
259United States' other appellant's submission, para. 44 (referring to China's first written submission to
the Panel, paras. 63-67; China's second written subm ission to the Panel, paras. 6-18; and China's opening
statement at the second Panel meeting, paras. 3-11).
260United States' other appellant's submission, para. 44 (referring to the complainants' joint oral
statement at the first Panel meeting, paras. 45 and 51; United States' second written submission to the Panel,
paras. 341 and 342; United States' opening statement at the second Panel meeting, paras. 109-111; Mexico's
second written submission to the Panel, paras. 346-348; and Mexico's opening statement at the second Panel
meeting, paras. 6-9).
261United States' other appellant's submission, para. 45.

Mexico, the Panel "misconstrued" its terms of reference and the "relevant point in time" for its
analysis of these annually recurring measures.
262
143. The United States and Mexico seek to distinguish the present case from US – Certain EC
Products, where the Appellate Body found that the panel had erred in making a recommendation on
an expired measure. First, unlike US – Certain EC Products , where the measure at issue had ceased
to exist prior to the establishment of the panel, in the present dispute, the annual export duty and quota
measures were in effect on the date the Panel w as established. Second, the measure at issue in US –
Certain EC Products was not one that was "maintained over time through the annual recurrence of
legal instruments"; whereas, in the present dispute, even though the impugned legal instruments have
been superseded, these measures nonetheless maintain legal effect through the recurrence of the
following year's legal instrument.263
144. The United States and Mexico recall that, throughout the Panel proceedings, China
introduced, amended, and repealed a number of le gal instruments, decreasing the burden of export
restraints imposed on bauxite and fluorspar, with a view to justifying the imposition of the export
restraints on these products under Article XX of the GATT 1994. This could have effectively
prevented the complainants from getting recommen dations on the challenged measures found to be
inconsistent as of the date the Panel was establishe d. According to the United States and Mexico, a
"correct and reasonable interpretation from a systemic point of view" avoids creating a "loophole" in
the system whereby complainants could find themse lves "taking aim" at "appearing and disappearing
targets", and whereby WTO Members could evade a panel's scrutiny by removing measures during
panel proceedings and reinstating them in the future without any consequences.264
2. Article VIII:1(a) of the GATT 1994 and Paragraph 11.3 of China's Accession
Protocol
145. The United States requests the Appellate Body to reverse the Panel's conclusion that China's
requirement for enterprises to pay a bid-winning fee in order to export bauxite, fluorspar, and
silicon carbide under its export quot a regime is not inconsistent with Article VIII:1(a) of the
GATT 1994 and Paragraph 11.3 of China's Accession Protocol.
146. First, the United States alleges that the Panel incorrectly found that China's bid-winning fee is
not a fee or charge "imposed on or in connection with … exportation" in the sense of

262United States' other appellant's submission, para. 56.
263United States' other appellant's submission, paras. 60 and 61.
264United States' other appellant's submission, paras. 70 and 71.

Article VIII:1(a), notwithstanding the fact that pa yment of the fee is a legal prerequisite for
exportation, and is a requirement imposed in relation to the administration of a quantitative restriction.
The Panel properly recognized that the phrase "on or in connection with … exportation" has a "broad
temporal view", and explained that Article VIII:1(a) refers to fees or charges that are applied not only
"at the moment in time of exportation" but also "in association with exportation".
265 However, the
United States contends that the Panel erred by addi ng an additional test, namely that fees and charges
in connection with exportation would "typically" be li mited to "specific fees, charges, formalities or
requirements, associated with customs-related documentation, certification and inspection, and
statistical matters". 266 This is also inconsistent with the context provided by Article VIII:4 of the
GATT 1994, because China's bid-winning fee falls w ithin the examples of items (b) "quantitative
restrictions" and (c) "licensing" of the list set out in that provision. In addition, the United States
argues that the Panel's reliance on the GATT panel report in US – Customs User Fee does not support
the conclusion that the bid-winning fee is not a fe e imposed on or in connection with exportation,
because the part of that GATT panel's reasoning cite d by the Panel in the present case relates to the
meaning of the term "services rendered" and not to the meaning of "on or in connection with …
exportation".
147. Second, the United States alleges that the Panel erred in concluding that Article VIII of the
GATT 1994 is not applicable to China's bid-winni ng fee because it does not relate to any service
rendered. The Panel correctly concluded that the bid-winning fee is not related to the approximate
cost of a service rendered, but, for the United States, this conclusion weighs in favour of a finding that
the fee is inconsistent with Article VIII:1(a), and not of a finding that the fee falls outside the scope of
Article VIII altogether. The latter finding would tu rn Article VIII on its head, allowing a Member to
impose any fee at any level, even where there was no service rendered.
148. The United States also takes issue with the Panel's statement that, because bid-winning fees
would necessarily be "variable", such fees c ould not be related to any service rendered. 267 The mere
fact of "variability" does not mean that a fee is necessarily disconnected from services rendered. In
addition, a finding that a certain type of fee might al ways be inconsistent with Article VIII:1(a) does
not mean that the fee, for that reason alone, falls ou tside the scope of Article VIII. Instead, in the
United States' view, if it does not meet the requireme nt of being limited to the approximate cost of
services rendered, then such a fee is inconsistent with Article VIII:1(a).

267United States' other appellant's submission, para. 35 (referring to Panel Reports, para. 7.850).

149. Finally, the United States submits that the Pane l erred in finding that China's imposition of a
bid-winning fee is not inconsistent with Paragra ph 11.3 of China's Accession Protocol. The Panel's
analysis of the bid-winning fee under Paragraph 11.3 of the Accession Protocol flowed from its
Article VIII:1(a) analysis, and was therefore similarly flawed.
E. Claims of Error by Mexico – Other Appellant
1. Conditional Appeal regarding the Panel's Recommendations
150. Mexico incorporates by reference into its other appellant's submission the arguments
concerning the Panel's recommendations on annual ex port quota and export duty measures set out in
section IV of the United States' other appellant's submission.268
2. Involvement of the CCCMC in the Allocation of Export Quotas and
Article X:3(a) of the GATT 1994
151. Mexico requests the Appellate Body to reverse the Panel's findings that the involvement of
the CCCMC in China's administration of its export quota regime is consistent with Article X:3(a) of
the GATT 1994, including the Panel's findings con cerning the interpretation and application of
Article X:3(a).269 Mexico contends that the Panel erred in its interpretation of Article X:3(a) by
requiring complainants bringing "as such" claims to demonstrate that a challenged measure
necessarily leads to partial and/or unreasonable admini stration. Since Mexico's claims relate to the
structure rather than the application of China's quota allocation system, no evidence of actual partial
or unreasonable administration was required, nor was it necessary to show that partial or unreasonable
application would inevitably result. To require evidence of partiality or unreasonableness would
"ignore[] the realities of the social and political cont ext in which the trade association's activities take
place".270
152. The Panel does not explain the legal basis for its "very real risk" standard, which is not
reflected in the text of Article X:3(a). 271 However, since the CCCMC is made up of competitors,
regardless of its administrative function, Mexico c ontends that "it must be assumed that a significant

268Mexico's other appellant's submission, para. 16 (referring to United States' other appellant's
submission, section IV).
269Mexico's other appellant's submission, para. 61.
270Mexico's other appellant's submission, para. 31.
271Mexico's other appellant's submission, para. 36.

possibility exists" that the CCCMC's decisions will lack objectivity and "be distorted in some degree",
and that applicants' confidential information "may be leaked" to competitors.
272
153. Mexico suggests that the involvement of the CCCMC in the quota allocation process "lead[s]
to an inherent conflict of interest" that "results in partial or unreasonable" administration contrary to
Article X:3(a).273 A risk of inconsistent administration ex ists whenever a private party "responsible
for assisting in the administration … has commercial interests" adverse to those of the applicants. 274
This risk increases when the private party "exerc ises discretionary authority over applicants", and
becomes even more problematic when the private party "is granted access to the confidential business
information" of the applicants.275
154. Specifically, in the context of partial administra tion, Mexico contends that the Panel's finding
that the CCCMC played a purely "administrative/ clerical function" in the quota administration
process is factually incorrect. 276 Even assuming arguendo that the CCCMC's role is merely
administrative, it may still present a "very real risk" of partial administration. 277 The panel in
Argentina – Hides and Leather found partial administration where a private party association with
conflicting commercial interests played an observatory role in the customs classification process, but
was, according to Mexico, not in a position to influe nce the result of the process. While the Panel in
this dispute "purported to agree with [this] appro ach", it then "effectively disregarded" it by finding
that an inherent conflict of interest can be remedied if the party with the adverse interest does not have
"influence in the process". 278 Mexico suggests that the fact that China's export quota regime
"inherently contains the possibility of disclosur e of confidential business data to commercial
competitors" means that its administration is unr easonable, even if the confidential information
submitted by quota applicants is required and relevant to the CCCMC's task.279
155. Finally, Mexico contends that the Panel failed to make an objective assessment of the facts as
required by Article 11 of the DSU. Rather than ev aluating the evidence on record in its totality, the
Panel only considered isolated aspects of China's regime and ignored other evidence regarding the
CCCMC's responsibilities. If the Panel had made an objective assessment, it would have found that

272Mexico's other appellant's submission, para. 58.
273Mexico's other appellant's submission, para. 39.
274Mexico's other appellant's submission, para. 39.
275Mexico's other appellant's submission, para. 39.
276Mexico's other appellant's submission, para. 43.
277Mexico's other appellant's submission, para. 42.
278Mexico's other appellant's submission, para. 42 (referring to Panel Reports, para. 7.777).
279Mexico's other appellant's submission, para. 46.

the CCCMC's role is not purely administrative, and that the CCCMC has "a significant amount of
discretion" regarding which applicants receive export quotas.
280 For example, in the context of the
direct quota allocation system for coke, the CCCMC is the "sole administrative division" that
"reviews, evaluates, and recommends which applicants qualify for consideration by MOFCOM".281 In
the context of the quota bidding system, the CCCMC not only plays a significant role in the
composition of the Bidding Offices, but also "evalu ates, verifies, and recommends applicants" with
respect to certain raw materials. In addition, while the CCCMC does not make final determinations,
its verification of applicants' qualifications fo r consideration without any "real oversight" has
"obvious implications" for the final outcomes. 282 In Mexico's view, had the Panel made an objective
assessment of this matter, it would have found that the requirement to provide confidential business
information to the CCCMC "created an inherent conf lict of interest that result[ed] in a partial and
unreasonable administration".283
F. Claims of Error by the European Union – Other Appellant
1. Conditional Appeal regarding the Panel's Recommendations
156. The European Union submits a conditional appeal in the event the Appellate Body were to
accept the relevant ground of appeal raised by China and reject the relevant other appeals submitted
by the United States and Mexico. In that case, the European Union would argue that the Panel erred
when it found that the European Union "requested the Panel not to make findings or recommendations
on the legal instruments taking effect on 1 January 2010" and that the European Union "narrowed the
Panel's terms of reference during the course of the proceedings". 284 The European Union submits
several arguments in support of its assertion.
157. First, the European Union obser ves that the Panel relied on th e European Union's statement
that it "agrees with the views expressed by th e United States and Mexico in their opening
statement".285 The European Union submits that it "nev er explicitly or implicitly stated that it
withdraws its claims on replacement measures, or that it narrows the Panel's terms of reference". 286

280Mexico's other appellant's submission, para. 53.
281Mexico's other appellant's submission, para. 53. (original emphasis)
282Mexico's other appellant's submission, para. 56.
283Mexico's other appellant's submission, para. 60.
284European Union's other appellant's submission, para. 3 (referring to Panel Reports, paras. 7.21
and 7.22).
285European Union's other appellant's submission, para. 21 (referring to Panel Reports, para. 7.21 and
footnote 62 thereto).
286European Union's other appellant's submission, para. 25.

The European Union argues that "[a] simple statem ent that a party generally agrees with the views
expressed by the other complainants cannot be interp reted as that party's incorporation of the other
complainants' claims and arguments into its own case."
287 Therefore, the Panel erred in finding that
the European Union requested the Panel to "narrow" its terms of reference.288
158. Second, with respect to the Panel's reliance on the European Union's argument that the legal
instrument subjecting bauxite to an export duty in 20 09 was within the Panel's terms of reference, the
European Union alleges that the statement of the European Union to which the Panel refers did not
discuss replacement measures at all. Instead, it discussed the way the Panel should treat expired
measures that were not replaced, and could not have been the basis for a finding that the
European Union had withdrawn its claims on measures that were replaced.
159. Third, with respect to the Panel's reliance on the European Union's inclusion of only one
measure that took effect after 1 January 2010 in cer tain tables provided to the Panel in response to
questions, the European Union observes that the Pa nel asked for the tables in order to assess China's
assertion that the European Union's first written submission to the Panel did not specify the
challenged legal instruments in sufficient detail. The European Union considers that there was no
basis for the Panel to consider, based on these res ponses, that the European Union was requesting the
Panel not to make findings on legal instruments taking effect after 1 January 2010.
160. In the European Union's view , since the Panel erred in excluding "the 'amendments or
extensions, replacement measures, renewal measur es and implementing measures' that took effect
after January 1 2010" from its terms of reference, th e Panel acted inconsistently with its obligations
under Article 7.1 of the DSU, which obliges pa nels to respect their terms of reference.
289 According
to the European Union, a panel's interpretation of a party's written submissions, oral statements, and
replies to questions constitute a part of the panel' s assessment of the "matter" before it and thus, the
Panel's failure to make an objective assessment in th is respect was inconsistent with Article 11 of the
DSU. The European Union also argues that, as a re sult of the Panel's errone ous determination of its
terms of reference, and its "consequent failure" to make findings on the consistency of the
replacement measures, the Panel failed to recommend that China bring its replacement measures into
compliance with the covered agreements, thereby acting inconsistently with Article 19.1 of the
DSU.290 The European Union requests the Appellate Bo dy to complete the Panel's analysis and find

287European Union's other appellant's submission, para. 8.
288European Union's other appellant's submission, para. 8.
289European Union's other appellant's submission, para. 46.
290European Union's other appellant's submission, paras. 46-49.

that the 2010 replacement measures are inconsistent with China's obligations under Article XI of the
GATT 1994; and to recommend that China bring the measures into compliance with its WTO
obligations.
G. Arguments of China – Appellee
1. Conditional Appeals of the United Stat es and Mexico regarding the Panel's
Recommendations
161. China recalls that the appeals by the Unite d States and Mexico are conditional upon the
Appellate Body upholding China's appeal that th e Panel was not entitled to make a recommendation
regarding the "series of measures" that extends to replacement measures. China highlights that, in
their conditional other appeal, the United States and Mexico requests the Appellate Body to find that
the Panel erred in failing to make a recommenda tion regarding the expired 2009 measures that
extends to replacement measures. However, if the Appellate Body finds that the recommendation
regarding a "series of measures" cannot extend to re placement measures, as requ ested by China, then
a recommendation regarding the expired 2009 measur es cannot extend to the replacement measures
either, because they were excluded from the Panel's terms of reference.
162. Regarding the argument by the United States and Mexico that the Appellate Body's findings
in US – Certain EC Products do not apply to measures that expire after a panel's establishment, China
submits that the Appellate Body's finding in that case was not dependent on the measure at issue
expiring before a panel's establishment. Rather, the Appellate Body's finding is premised on a
"straightforward" view that, if a measure no longer exists, it cannot be modified or withdrawn, and
that, therefore, there is no legal basis for a r ecommendation under Article 19.1 of the DSU, because
the DSB cannot "compel" a Member to undert ake action that can no longer be undertaken. 291 I n
support of its argument, China refers to the panel report in US – Poultry (China) , where the panel
refused to make a recommendation regarding th e impugned US measure in that case because the
measure had expired after the panel's establishment.
163. China observes that the United States and Mexico distinguish between "legal instruments"
and "measures"292, and suggests that their conception of a "measure" consists of an "'ongoing conduct'
that stretches into the future through 'individual le gal instruments'", with the alleged ongoing conduct

291China's appellee's submission, paras. 84 and 85.
292China's appellee's submission, para. 89 (referring to United States' other appellant's submission,
para. 61; and Mexico's other appellant's submission, paras. 5 and 6). (emphasis added by China omitted)

in this case being the "maintenance" of export duties and quotas on certain products "over time".
293
China notes that the particular arguments put forwar d by the United States and by Mexico are "highly
reminiscent" of the arguments made by Brazil and by the Eu ropean Union in US – Orange Juice
(Brazil) and US – Continued Zeroing , respectively, but contends that these "analogies are
misplaced".294 Unlike in US – Continued Zeroing and US – Orange Juice (Brazil) , the complainants
did not identify any "'ongoing conduct' measure th at 'serves to maintain the imposition of export
duties and quotas over time'" in their panel requests.295
164. According to China, the evidentiary standard for demonstrating the existence of an "ongoing
conduct" measure is high, and requires a "'density ' of facts, over time, to demonstrate [its]
existence".296 China asserts that, in the present dispute, the complainants have not even attempted to
prove the existence of "'ongoing condu ct' through a string of annual measures". 297 China notes that
during the Panel proceedings, the United States a nd Mexico argued that the 2009 and 2010 measures
did not form a "continuum of 'ongoing conduct'" that serves to maintain the same export duties and
quotas over time, arguing instead that the 2010 meas ures were "substantively different" and "were
irrelevant to the legal question before the Panel". 298 For these reasons, China asserts that the
complainants "neither challenged nor proved the existence of a series of annual measures that 'serve to
maintain the imposition of export duties and quotas over time'".299
165. China disagrees with the argument made by th e United States and by Mexico that, if no
recommendation were made regarding the replacement measures, there would be no resolution to the
dispute, thereby creating a "loophole in the system". 300 According to China, a Member's strategic
choices about which acts and omissions it challenges do not create a "loophole"; instead, China
highlights that the "responsibility" for a complainant's choices lies "squarely" with the complainant.301
The "fundamental flaw" in the United States' a nd Mexico's arguments is that they seek a
recommendation that "stretches" to include repl acement measures that they themselves expressly

293China's appellee's submission, para. 90. (original emphasis)
294China's appellee's submission, paras. 91 and 92.
296China's appellee's submission, para. 94 (referring to Panel Report, US – Orange Juice (Brazil) ,
paras. 7.175 and 7.177, in turn referring to Appellate Body Report, US – Continued Zeroing, para. 191).
297 China's appellee's submission, para. 95.
298China's appellee's submission, paras. 95-97 (referring to United States' second written submission to
the Panel, para. 338; Mexico's second written submission to the Panel, para. 343; and the complainants' joint
opening statement at the first Panel meeting, para. 52).
299China's appellee's submission, paras. 97 and 98.
300China's appellee's submission, paras. 99 and 100.

excluded from the dispute.
302 Finally, China "strongly objects" to the argument that, during the Panel
proceedings, it "moved the target" in order to "evade 'responsibility'"303; rather, China recognized that
the Panel had discretionary authority to make fi ndings regarding the expired 2009 measures and to
make findings and recommendations on the 2010 replacement measures.
2. Conditional Appeal of the Europ ean Union regarding the Panel's
Recommendations
166. China agrees with the European Union that an objective assessment of the parties' arguments
forms part of a panel's obligations under Article 11 of the DSU. However, China claims that the
Panel did undertake an objective assessment of the European Union's arguments, and requests the
Appellate Body to reject the European Union's clai ms of error. China argues that, even though the
Panel did not refer to the complainants' joint opening statement at the first Panel meeting in finding
that the European Union had joined the United States and Mexico in withdrawing its claims regarding
the replacement measures, the objectivity of the Pane l's assessment must be assessed in the light of
this joint statement. In response to the European Union's argument that its statement of agreement
with the United States' opening statement at the second Panel meeting was only a "simple statement of
solidarity"304, China argues that, whatever the "subjective intentions" of the European Union, the
Panel was required to judge the Eu ropean Union's statement "'objectiv ely' on the basis of the plain
meaning of the words used". 305 According to China, in assessing the European Union's remarks, the
Panel took them at "face value" and did not commit any legal error.306
167. China also disagrees that the table of measures submitted by the European Union was only for
the preparation of the descriptive part of the Pane l Reports and that the Panel therefore erred in
relying on it for determining its terms of referen ce. The European Union' s responses were used for
the purpose for which they were given, that is, "t o clarify the rather uncertain scope of the matter
before the Panel".307 China highlights that the European Un ion gave the same response regarding the
2010 replacement measures in two separate instances a nd, therefore, the European Union's response
was not influenced by the Panel's stated purpose of seeking guidance in drafting the descriptive part of
its Reports. China "sees no reason" why responses to questions posed by a panel cannot be used to

303China's appellee's submission, paras. 107 and 108 (referring to China's first written submission to the
Panel, paras. 51 and 70).
304China's appellee's submission, para. 132 (quoting European Union's other appellant's submission,
para. 23).
305China's appellee's submission, para. 133. (emphasis omitted)
306China's appellee's submission, paras. 131-134.

determine that a complainant has withdrawn its claims as, by definition, a complainant can only
"impart" such information after the panel request has been filed.
308 In the light of these arguments,
China asserts that the Panel properly concluded from the European Union's submissions "as a whole"
that the European Union had withdrawn its claims regarding the 2010 replacement measures.309
168. Regarding the European Union's request for the A ppellate Body to complete the analysis with
respect to Article XI of the GATT 1994, China notes that the Appellate Body has used its authority to
complete the analysis "sparingly", "taking care" to ensure that it respects the "institutional limits"
placed on its authority.
310 In China's view, the panel is the "t rier of facts" and the Appellate Body
cannot "seek facts" or make "factual findings".311 China contends that the European Union has not set
out an adequate basis for the Appella te Body to complete the analysis . First, the European Union has
not stated which replacement measures it now wishes to be the subject of findings and
recommendations. Second, although the European Un ion requests the Appellate Body to find that
certain export duties violate Article XI of the GATT 1994, neither the European Union's panel
request, nor the tables submitted by it, include a clai m that China's export duties are inconsistent with
Article XI. Third, China highlights that the Eur opean Union has not advanced any legal argument in
support of its request to the Appellate Body to comp lete the analysis. Moreover, China notes that the
European Union has not identified any facts that would be relevant to the Appellate Body's
completion of the analysis.
3. Involvement of the CCCMC in the Allocation of Export Quotas and
Article X:3(a) of the GATT 1994
169. China requests the Appellate Body to deny Me xico's appeal and uphold the Panel's finding
that the involvement of the CCCMC in the administration of China's export quota regime is consistent
with Article X:3(a) of the GATT 1994. 312 China contends that Mexico's interpretation of
Article X:3(a) is flawed, specifically with respect to the legal standard and the evidence required to
meet that standard in the context of "as such" cl aims. China also contests Mexico's submission that
the Panel failed to make an objective assessment of the matter as required by Article 11 of the DSU.

308China's appellee's submission, paras. 128 and 129.
310China's appellee's submission, para. 137 (referring to Appellate Body Report, Australia – Apples ,
para. 368; Appellate Body Report, Australia – Salmon, paras. 209, 212, 241, and 255; Appellate Body Report,
Canada – Autos , paras. 133 and 144; Appellate Body Report, Korea – Dairy , para. 102; Appellate Body
Report, Korea – Various Measures on Beef , para. 128; Appellate Body Report, US – Continued Zeroing ,
para. 189; and Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 438).
312China's appellee's submission, paras. 13 and 263.

170. China submits that Mexico's proffered legal st andard for "as such" claims is erroneous and
contrary to the Appellate Body's approach, an d should therefore be rejected. Based on an
interpretation of the term "adminis ter", and consistent with the re quirement that a Member provide
"solid evidence"
313 in support of such a claim, the Appellate Body has found that a complainant
challenging a measure "as such" under Article X:3(a) must demonstrate that action foreseen or
anticipated pursuant to the measure will, at least in defined circumstances, "necessarily lead to" WTO-
inconsistent administration. 314 China disagrees with Mexico's assertion that the Panel interpreted
Article X:3(a) in the context of its "as such" cha llenge so as to require a demonstration of specific
instances of actual unreasonable or partial administra tion. Rather, the Panel found that Mexico had
failed to show that the CCCMC " can exercise any discretion " in such a way as to constitute WTO-
inconsistent administration, much less that th e challenged measure would necessarily lead to WTO-
inconsistent administration. 315 China also rejects Mexico's suggestion that requiring evidence of
partiality or unreasonableness "ignores" certain realities. 316 This is not a reason to abandon the
interpretation stated by the Appellate Body, na mely, that a complainant must provide "solid
evidence"317 showing how and why the features of the measure and the administrative processes
challenged "as such" "necessarily lead to" WTO-inconsistent administration.318
171. Contrary to Mexico's assertion, the Appellate Body report in EC – Selected Customs Matters
does not provide any support for Mexico's suggestion that the term "uniform" should be interpreted to
require demonstration that a measure challenged "as such" "necessarily leads to" non-uniform
administration, while the terms "impartial" and "reasonable" enable a complainant to benefit from an
"assum[ption] that a significant possibility [of partial and unreasonable administration] exists".
319
Indeed, the Appellate Body stated that the "necessaril y leads to" standard arises from an interpretation
of the term "administer", and applies whether non- uniform, partial, or unreasonable administration is

313China's appellee's submission, para. 190 (referring to Appellate Body Report, US – Oil Country
314China's appellee's submission, para. 190 (referring to Appellate Body Report, EC – Selected Customs
Matters, paras. 201 and 226).
315China's appellee's submission, para. 203 (quoting Panel Reports, para. 7.783). (emphasis added by
China)
316China's appellee's submission, para. 198 (referring to Mexico's other appellant's submission,
para. 31).
317China's appellee's submission, para. 199 (referring to Appellate Body Report, US – Oil Country
318China's appellee's submission, para. 199 (referring to Appellate Body Report, EC – Selected Customs
Matters, para. 226).
319China's appellee's submission, para. 196 (referring to Mexico's other appellant's submission,

alleged.
320 China also points out that the "erroneous presumption of WTO-inconsistency" implicated
by Mexico's proffered standard would be at odds with the requirement that complainants bear the
burden of establishing that the administration of a measure is inconsistent with Article X:3(a).321
172. China contests Mexico's suggestion that the Panel disregarded the proper interpretation of
Article X:3(a) when it found that the involvement of the CCCMC in the quota administration regime
was not WTO-inconsistent. Rather , the Panel found that "Mexico had failed to demonstrate that the
defined circumstances it identifies arise in the present case." 322 Specifically, the Panel distinguished
the CCCMC members from the CCCMC Secretariat, a nd found that the CCCMC Secretariat does not
have commercial interests adverse to those of the quota applicants. 323 In addition, Mexico did not
establish that the tasks delegated to the CCCMC were more than clerical or administrative, and the
Panel correctly found that the CCCMC Secretaria t may not exercise significant discretion or
judgement in evaluating whether applicants meet the eligibility criteria that are "objectively specified
in Chinese law".324 Moreover, the Panel did not find that the provision of information to the CCCMC
Secretariat amounted to providing information to quota applicants' competitors, because the Panel had
found that "[a]pplications for export quotas are pr ovided solely to CCCMC's Minerals & Metals
Department and not to the membership of the CCCMC itself".325
173. China emphasizes that, contrary to Mexico's argument, there is no basis on which the
Appellate Body can assume that confidential busin ess information submitted by quota applicants to
the CCCMC Secretariat will be disclosed to their co mpetitors. In the light of the presumption that
China will abide by its WTO obligations, the "possibi lity" that such confidential information "may be
leaked" cannot be assumed.326 While this presumption can be rebutted, Mexico "failed to provide any
such evidence". 327 In fact, rather than providing solid evidence demonstrating that a measure
challenged "as such" will "necessarily lead to" WTO- inconsistent administration, Mexico conceded
that the CCCMC Secretariat's involvement in certain elements of quota administration can be and has

320China's appellee's submission, para. 197 (referring to Appellate Body Report, EC – Selected Customs
Matters, para. 226).
322China's appellee's submission, para. 211. (original emphasis)
323China's appellee's submission, para. 212 (referring to Panel Reports, para. 7.774). China highlights
the fact that Mexico did not contest this fact during the Panel proceedings ( ibid., para. 212) and that Mexico's
assertion on appeal that the CCCMC Secretariat has commerc ial interests adverse to applicants is not supported
by a Panel finding (ibid., para. 213).
325China's appellee's submission, para. 222 (quoting Panel Reports, para. 7.778). (emphasis added by
China)
327China's appellee's submission, para. 230. (original emphasis)

been implemented in a WTO-c onsistent manner, thus confir ming that the measures do not
"necessarily lead to" unreasonable and partial conduct.
174. With regard to the Panel's assessment of the matter under Article 11 of the DSU, China
contends that Mexico has merely demonstrated that the Panel, as the trier of facts, concluded that
Mexico failed to establish that the "CCCMC Secretariat ' can exercise any discretion, partiality or bias
in the administration' of export quotas".
328 Recalling the relevant standard under Article 11 of the
DSU, China agrees with Mexico's statement that the Panel was obliged "to consider evidence before it
in its totality" 329, but adds that the Appellate Body has al so underscored a panel's discretion to give
"certain elements of evidence more weight than other elements". 330 Furthermore, to support a claim
of violation under Article 11, "a participant must explain why evidence [not explicitly referred to by
the panel] is so material to its case that the pa nel's failure explicitly to address and rely upon the
evidence has a bearing on the objectiv ity of the panel's factual assessment." 331 Mexico failed to
identify any evidence demonstrating that the CCCMC Secretariat undertakes its delegated quota
administration tasks with "no real oversight" 332, or that it has significant discretion to affect the award
of quotas.
175. China maintains that the Panel found the CCCMC S ecretariat's role to be "circumscribed" by
Chinese law333, and that Mexico had not demonstrated that the CCCMC Secretariat can exercise any
discretion. In the context of quotas allocated di rectly, the Panel found the CCCMC Secretariat's role
to be "limited to assisting MOFCOM"334 in verifying the compliance of applicants with the qualifying
criteria "objectively specified under Chinese law".335 It was also on the basi s of the same evidence
described by Mexico that the Panel found, with r espect to quotas allocated through bidding, that the
CCCMC Secretariat assists MOFCOM's Bidding Committee, which is the "main authority responsible
for organizing the bidding process".336 Having reflected on all of the evidence concerning the roles of

328China's appellee's submission, paras. 22 and 261 (quoting Panel Reports, para. 7.783). (emphasis
added by China)
329China's appellee's submission, para. 243 (quoting Appellate Body Report, EC – Fasteners (China) ,
para. 441).
330China's appellee's submission, para. 244 (quoting Appellate Body Report, EC – Asbestos, para. 161).
331China's appellee's submission, para. 244 (quoting Appellate Body Report, EC – Fasteners (China) ,
para. 442).
332China's appellee's submission, para. 246 (quoting Mexico's other appellant's submission, para. 56).
333China's appellee's submission, paras. 21 and 251 (referring to Panel Reports, paras. 7.780 and 7.781).
335China's appellee's submission, para. 255. (original emphasis)
336China's appellee's submission, paras. 251 and 258 (quoting Panel Reports, para. 7.766).

the CCCMC departments in quota administration, th e Panel concluded that Mexico had failed to
establish "even the 'risk'" of WTO-inconsistent administration.
337
4. Article VIII:1(a) of the GATT 1994 and Paragraph 11.3 of China's Accession
Protocol
176. China requests the Appellate Body to uphold th e Panel's finding that the bid-winning price
imposed by China does not constitute a fee or char ge of whatever character imposed in connection
with exportation within the meaning of Article VIII: 1(a) of the GATT 1994, and that the bid-winning
price is not a charge applied to exports falling within the scope of Paragraph 11.3 of China's
Accession Protocol.
177. China maintains that the Panel was correct to conclude, based on the substantive nature of
China's bidding procedure, that the bid-winning pri ce does not constitute a fee or charge imposed "on
or in connection with … exportation". In additi on, the Panel correctly found that the bid-winning
price is not a fee or charge in the sense of Article V III:1(a), because it is not collected in exchange for
a "service rendered". China disagrees with the United States' contention that, if no service is
rendered, a fee or charge will be inconsistent with Article VIII:1(a), rather than fall outside the scope
of the provision. Instead, Article VIII:1(a) is m eant to ensure that, when services are rendered, the
amount charged for those services is proportionate to their cost. Where there is no service, however, a
fee or charge is not related to any "service rendere d", and, therefore, the "mischief addressed by the
clause", namely charging an excessive amount for "services rendered", is not present.
338
178. China also claims that, in order to establish that a fee or charge is inconsistent with
Article VIII:1(a), a complainant must demonstrate that the fee or charge is inconsistent with every
condition set out in Article VIII:1(a). In China's view, the GATT panel report in US – Customs User
Fee stands for that proposition. 339 Furthermore, Article VIII:1(a) would have been drafted differently
had the drafters intended the provision to constitu te a residual prohibition in the sense advanced by
the United States. For instance, the provision coul d have been drafted to say "no fees or charges
(other than duties or internal taxes) shall be instituted or maintained on in connection with importation
or exportation, unless limited in amount to th e approximate cost of a service rendered". 340 C h i n a
further contends that, even if the bid-winning price were to fall within the scope of Article VIII:1(a),

339China's appellee's submission, para. 307 (referring to GATT Panel Report, US – Customs User Fee ,
para. 69).

the United States did not demonstrate that the bid-winning price "represents an indirect protection or a
taxation of exports for fiscal purposes".
341
179. China notes that quota allocation through auctioning ensures that the most efficient producers
are granted the right to export and that this ensures allocation of quotas in the least trade-distorting
manner. Finding China's bid-winning price to be inc onsistent with Article VIII:1(a) would mean that
all quota allocation accomplished through bidding or auctioning by WTO Members would be
prohibited.
180. Finally, China submits that the United States did not establish that the bid-winning price is
inconsistent with Paragraph 11.3 of China's Accession Protocol. The United States' argument is based
solely on the allegation that the Panel's analysis with respect to Paragraph 11.3 flowed from its
erroneous analysis of Article VIII:1(a). China maintains that the Panel's finding under
Article VIII:1(a) was correct, and that, therefore, th e Panel was also correct in finding that the bid-
winning price is not inconsistent with Paragraph 11.3 of China's Accession Protocol.
H. Arguments of the Third Participants
1. Brazil
181. With respect to China's claim that the Pane l erred in finding that Section III of the
complainants' panel requests complied with Artic le 6.2 of the DSU, Brazil cautions that an
excessively formalistic approach to the interpretati on of Article 6.2 could unjustifiably increase the
procedural burden on the parties. Brazil submit s that the Appellate Body has identified two major
objectives of a panel request: a jurisdictional func tion and a due process function. In situations
affecting the proper delimitation of a panel's jurisdic tion, corrections or clarifications of an alleged
error or imprecision cannot modify the scope of the dispute as expressed in the panel request.
Conversely, where defects in the panel request allegedly affect the due process function of the request,
subsequent submissions may be ta ken into consideration by panels and the Appellate Body in the
analysis of whether the due process rights of a pa rty have been prejudiced. Therefore, subsequent
submissions should not, in Brazil's view, be a priori excluded from serving as evidence relevant to
that legal determination.
182. Brazil maintains that the Panel correctly inte rpreted the words "temporarily applied" in
Article XI:2(a) of the GATT 1994. A "temporary" measure must either have a time-limit for its

application, or must address a passing need, the term ination of which is foreseeable at some point in
the near future. If a measure is applied to addr ess a permanent need, its design and structure would
indicate that it is not "temporarily" applied. As such, Brazil notes that a shortage of exhaustible
natural resources caused by declining reserv es cannot be addressed by measures "temporarily
applied". Brazil also highlights that Articles XI :2(a) and XX(g) of the GATT 1994 serve different
purposes by means of different requirements. While Article XX(g) disciplines long-term conservation
policies, Article XI:2(a) relates to temporary supply crises. Therefore, Brazil contends that measures
adopted pursuant to Article XI:2(a) are not intend ed to deal with perman ent needs, because such
needs, in any event, could not be addressed by temporary measures.
183. Brazil argues that the Panel read into the phr ase "made effective in conjunction with" in
Article XX(g) of the GATT 1994 two cumulative requi rements, namely, one relating to the joint
application of domestic and intern ational restrictions, and the other relating to the effectiveness of
domestic restrictions. Brazil quotes fro m the Appellate Body reports in US – Gasoline and US –
Shrimp in support of the proposition that, in previous disputes, the expression "made effective in
conjunction with" has been found to relate only to th e joint application of domestic restrictions with
measures relating to the conservati on of exhaustible natural resources.
342 Brazil contends that, while
the GATT panel in Canada – Herring and Salmon may have interpreted differently the phrase "made
effective in conjunction with", the Spanish and Fren ch versions of Article XX(g) confirm that the
Appellate Body's interpretation in US – Gasoline and US – Shrimp was correct. Article XX(g) aims
simply at ensuring even-handedness in the applica tion of measures relating to the conservation of
exhaustible natural resources.
2. Canada
184. Canada submits that the Appellate Body should uphold the Panel's finding that Article XX of
the GATT 1994 is not available as a defence for inc onsistencies with Paragraph 11.3 of China's
Accession Protocol. First, the ordinary meaning of the Note to Annex 6 of China's Accession
Protocol "does not support the argument that China may impose export duties on any products at any
rate in 'exceptional circumstances'", because the phrase "exceptional circumstances" is used only with
respect to increasing the rates applied at the time of China's accession to the maximum levels set out

342Brazil's third participant's submission, pa ra. 26 (quoting Appellate Body Report, US – Gasoline ,
pp. 20-21, DSR 1996:I, 3, at 19-20) and para. 27 (quoting Appellate Body Report, US – Shrimp , paras. 143
and 144).

in Annex 6.
343 The Panel, therefore, erred in "acquiescing" 344 to the European Union's argument that
China acted inconsistently with Paragraph 11.3 by not consulting with affected Members before
imposing export duties on raw materials that are not listed in Annex 6, as there is no right to impose
export duties on those products in the first place. Ca nada argues that the legal effect of the reference
in Paragraph 11.3 to Article VIII of the GATT 1994 is to "circumscribe" the application of export
charges by China in accordance with Article VIII, and Article XX is not a "necessary extension" of
Article VIII such that it may be assumed to be incorporated by reference to Article VIII. 345 Canada
also asserts that the Panel was correct in findi ng that Paragraph 170 of China's Accession Working
Party Report repeats China's commitments under GA TT rules, and is not related to export duties
prohibited under Paragraph 11.3. Relying on the or dinary meaning and context of China's Accession
Protocol, Canada does not dispute that Article XX is available to justify inconsistencies with the
GATT 1994 obligations set out in Paragraph 170, but contends that there is no suggestion that
obligations going beyond the requirements of th e GATT 1994, which China undertook pursuant to
Paragraph 11.3, are subject to the Article XX exceptions. If the negotiators had intended to
incorporate Article XX justifications into Paragr aph 11.3, they could have incorporated language
similar to that contained in Paragraph 5.1 of China's Accession Protocol.
185. With respect to the words "temporarily applie d", Canada disagrees with China's contention
that the Panel found that Article XI:2(a) imposes an "absolute limit" on the time period for which
export restrictions may be imposed. 346 Rather, the Panel found that the duration of an export
restriction must match the time it takes to prevent or relieve a critical shortage, a finding with which
Canada agrees. Measures that are reviewed regul arly, but imposed indefinitely, as the Panel found
China's measures to be, are not applied for a fi xed time, and hence fall outside the scope of
Article XI:2(a). Canada also disagrees with Chin a's contention that the Panel's interpretation of the
phrase "critical shortages" excludes from the scope of Article XI:2(a) export restrictions on non-
renewable, exhaustible natural r esources. Rather, the Panel's in terpretation permits a WTO Member
to relieve a critical shortage of an exhaustible natural resource through the temporary application of an
export restriction as long as the shortage is caused by a factor other than the resource's inherent
exhaustibility. With respect to the relationship between Article XI:2(a) and Article XX(g) of the
GATT 1994, Canada argues that the Panel did not find that the two provisions are mutually exclusive,

343Canada's third participant's submission, para. 14.
344Canada's third participant's submission, para. 16.
345Canada's third participant's submission, para. 18.
346Canada's third participant's submission, para. 36 (referring to China's appellant's submission,
paras. 337-341).

but rather that the absence in Article XI:2(a) of the safeguards found in the chapeau of Article XX
supports the conclusion that restrictions under Article XI:2(a) must be of a limited duration.
186. Canada agrees with the United States that the Panel erred in finding that the bid-winning fee
is consistent with Article VIII:1(a) of the GATT 1994 and with Paragraph 11.3 of China's Accession
Protocol. For Canada, the Panel rightly found that the bid-winning fee is a "fee" or "charge" within
the meaning of Article VIII:1(a). The Panel erre d, however, in interpreting the phrase "in connection
with" exportation to cover only charges connected with "customs-related activities" and in finding that
only charges collected in exchange for a "service rendered" fall within the scope of Article VIII.
347
Instead, the Panel should have adopted the same broad interpretation as the panel in China – Auto
Parts.348 Even if the bid-winning fee is not covere d by Article VIII:1(a) of the GATT 1994, the
charge constitutes an "export duty" prohibited unde r Paragraph 11.3 of China's Accession Protocol.
Paragraph 11.3 specifically addresses what Article VIII:1 does not, namely, export duties, and as such
these two provisions "create a tightly woven mesh that catches all charges imposed by the Chinese
government in connection with exportation".349
3. Colombia
187. Colombia submits that the Panel erred by findi ng that Section III of the complainants' panel
requests "present[ed] the problem clearly" in th e sense of Article 6.2 of the DSU because the
complainants failed to provide sufficient connecti ons between the 37 listed measures and the 13 listed
treaty provisions.350 The Appellate Body has found that a complainant must provide a brief summary
of the case, explaining succinctly how or why the measure at issue is inconsistent with a specific
WTO obligation. In failing to do so, the complain ant renders the due process objective of Article 6.2
ineffective, because neither the responding party nor th e third parties would be able to identify with
sufficient clarity the claims or problem at issue.
188. Colombia submits that the Appellate Body shou ld confirm the Panel's finding that Article XX
of the GATT 1994 may not be invoked as a justifica tion for inconsistencies with Paragraph 11.3 of
China's Accession Protocol. Colombia submits that the Panel erred in finding that China has acted
inconsistently with Paragraph 11.3 by not consulting with Members before imposing export duties on

(quoting Panel Reports, para. 7.844).
348See Canada's third participant's submission, para. 57 (referring to Panel Reports, China – Auto Parts,
paras. 7.177, 7.190, and 7.191).
349Canada's third participant's submission, para. 67.
350Colombia's third participant's submission, para. 2 and heading I.A.1.

raw materials not listed in Annex 6 to the Protocol , because the obligation to consult relates only to
the products listed in Annex 6, none of which were at issue here. With resp ect to the reference to
Article VIII in Paragraph 11.3, Colombia asserts that the "rule-exception relationship" between
Article VIII and Article XX of the GATT 1994 shows th at the reference to Ar ticle VIII incorporates
only that provision's conditions and not the availability of the general exceptions to Article XX.
351
189. Colombia also suggests that irrespective of the applicability of Paragraph 170 of China's
Accession Working Party Report to export duties, the requirement that such duties be "in full
conformity with [China's] WTO obligations " cannot be understood as allowing recourse to
Article XX. In accordance with effective trea ty interpretation, the use of the phrase "WTO
obligations" in Paragraph 170, as compared to "the WTO Agreement" in Paragraph 5.1 of China's
Accession Protocol, indicates that the former ex cludes exceptions, whereas the latter covers both
obligations and exceptions.
352
190. Colombia contends that the Panel erred in finding that measures relating to exhaustible
natural resources fall exclusively within the scope of Article XX(g) and not within Article XI:2(a) of
the GATT 1994. The ordinary meaning of the terms of Article XI:2(a), in their context, suggest that
the scope of application of the provision is not contingent on whether the product is an exhaustible
natural resource or not, as any product is potentially covered by Article XI:2(a). The "ultimate test" is
whether the product is essential to the exporting Member or is a "foodstuff" as that term is used in
Article XI:2(a).353 In Colombia's view, a single measure could be justified under several exceptions
contained in the GATT 1994, such as Article XI:2(a) and Article XX, so long as they fulfil the
particular requirements established in each provision.
191. Colombia submits that the Panel erred in interpreting the phrase "made effective in
conjunction with" in Article XX(g) of the GATT 1994 to require that a measure not only be related to
the conservation of natural resources, but also ensure the effectiveness of domestic restrictions on that
resource. In Colombia's view, the Panel's interpreta tion is at odds with the interpretation provided by
the Appellate Body in US – Gasoline and in US – Shrimp , which did not require such a "dual
purpose".
354

351Colombia's third participant's submission, para. 22.
352Colombia's third participant's submission, para s. 30-35 (referring to Appellate Body Report, US –
Wool Shirts and Blouses , para. 46; and Appellate Body Report, China – Publications and Audiovisual
Products, para. 223).
353Colombia's third participant's submission, para. 49.
354Colombia's third participant's submission, paras. 59 and 60.

192. Regarding China's export licensing system, Colo mbia disputes China's contention that the
"'open-ended' discretion" accorded to Chinese licensing authorities is not sufficient to conclude that its
export licensing system constitute a "restric tion" under Article XI:1 of the GATT 1994.
355 I n
Colombia's opinion, it is not the open-ended na ture (that is, the discretion to choose between a
WTO-consistent and a WTO-inconsiste nt application of the measure) that is at issue. Rather, the
Appellate Body should "focus on the economic consequences in a given marketplace so as to evaluate
whether economic operators will interpre t the discretion as [a] 'restriction'". 356 Although not "a priori
a 'restriction'" 357, if such discretion causes "a reasonable uncertainty that will discourage
exportations", then it constitutes a "rest riction" on exports under Article XI:1. 358 This interpretation
would be in keeping with the purpose of Article XI , which, as China acknowledges, is "to protect the
competitive opportunities for exports".359
193. Colombia agrees with China that the Panel erre d in interpreting and a pplying Article X:3(a)
of the GATT 1994 with regard to the "ope ration capacity" requirement for export quota
administration. Specifically, in Colombia's view , the Panel erred in interpreting the meaning of
"administer" to encompass the complainants' claim and in finding that the complainants challenged
"the features of an administrative process".360
4. Japan
194. Japan notes that the "security and predictability" of the multilateral trading system, as well as
the "prompt settlement" of disputes, will be "enda ngered" if panels can make recommendations only
for measures that have "not cease[d] to exist duri ng panel proceedings", and if the dispute settlement
process can be "circumvented" through "rapid -fire substitution" or annual revision of
WTO-inconsistent measures.361 Japan sees the Panel's recommendations on the "series of measures"
as aimed at plugging this "loophole". 362 Japan supports the conditional appeals of the United States
and Mexico because, in its view, where a challenge d measure is removed before the issuance of a

355Colombia's third participant's submission, para. 65.
356Colombia's third participant's submission, para. 66.
357Colombia's third participant's submission, para. 71.
358Colombia's third participant's submission, para. 66 . (original emphasis) Colombia substantiates its
argument on this point by referring to the interpreta tion of the term "restrictions" provided in Panel Report,
Brazil – Retreaded Tyres , para. 7.370, and Panel Report, Colombia – Ports of Entry , para. 7.240. ( Ibid.,
para. 68)
359Colombia's third participant's submission, para. 68 (referring to China's appellant's submission,
para. 548).
361Japan's third participant's submission, para. 12.
362Japan's third participant's submission, paras. 12 and 13.

panel report and where "factual and/or legal circumst ances" suggest that the measure is likely to be
renewed, a finding without a recommendation cannot lead to a conclusive settlement of the dispute.
363
195. Japan submits that the Appellate Body should c onfirm the Panel's finding that Article XX of
the GATT 1994 may not be invoked as a justification for inconsistencies with Paragraph 11.3 of
China's Accession Protocol. Japan doubts that the reference to "exceptional circumstances" in the
Note to Annex 6 to China's Accession Protocol establishes the applicability of Article XX to
Paragraph 11.3, and, even if it did, the possibilit y for China to impose higher rates in "exceptional
circumstances" is meant to apply on ly with respect to the products listed in Annex 6, which are not at
issue in this dispute. Moreover, the reference to Article VIII of the GATT 1994 does not confirm the
availability of Article XX. China did not invoke Ar ticle VIII for any of the export duties at issue and
"there seems to be little question" that the duti es in the present dispute are outside the scope of
Article VIII.364 In fact, export duties do not fall within the substantive scope of any provision of the
GATT 1994 and, therefore, cannot be inconsistent with the GATT 1994. On this basis, Japan argues
that Paragraph 170 of China's Accession Workin g Party Report cannot be interpreted as permitting
recourse to Article XX in cases of inconsistency with Paragraph 11.3 of China's Accession Protocol.
196. Japan also supports the Panel's interpretati on of the phrase "made effective in conjunction
with" in Article XX(g). Japan contends that the Panel's analysis and interpretation of Article XX(g) is
supported by the text and context of the provision, as well as the object and purpose and the structure
of the GATT 1994. In particular, Japan asserts that the Panel's reference to the purpose of an export
restriction being to render effective domestic restri ctions on production or consumption that serve a
conservation goal is consistent with the approach that has been taken by the Appellate Body as well as
that of the GATT panel in Canada – Herring and Salmon . Japan further alleges that China's
argument appears to imply that the objective or ef fect of a trade-restrictive measure should not be
relevant to an Article XX(g) analysis, and that this would reverse a consistent line of GATT and WTO
case law requiring a substantial relationship between the trade measure and a genuine conservationist
goal.
197. Japan further submits that China "effectivel y glosses over" the difference between limited
availability and a "critical shortage" of a r esource within the meaning of Article XI:2(a).365 The Panel
correctly established that there is no possibility of an existing shortage of an exhaustible natural

363Japan's third participant's submission, para. 14.
364Japan's third participant's submission, para. 30.
365Japan's third participant's submission, para. 92 (referring to joint appellees' submission of the

resource ever to cease to exist, meaning that it will not be possible to "relieve or prevent" it through
export restrictions applied on a temporary basis.
366 Furthermore, the phrase "temporarily applied"
must be read in the context of "critical shortages" . A shortage of an exhaustible natural resource, by
its very nature, cannot be restored in the future, and any restrictions imposed to relieve or prevent
such shortage can therefore not be of a "temporal" nature. 367 Japan also supports the
European Union's argument that the fact that Article XX(g) allows for derogations from GATT
obligations under stricter conditions than Article XI :2(a) suggests that the requirements of the latter
provision must be given a narrow interpretation in order not to render redundant the provision of the
former.368
198. Japan contends that the Panel effectively a ddressed China's argument regarding interpreting
Paragraphs 83 and 84 of China's Accession Workin g Party Report "harmoniously" with Paragraph 5.1
of China's Accession Protocol.369 That is, the Panel appropriately read Paragraph 5.1 of the Accession
Protocol to incorporate, as part of the WTO Agreement , the specific commitments China made in
Paragraphs 83 and 84 of its Accession Working Party Report. 370 Japan expresses "serious doubts"
about China's apparent rationale for applying an export performance cond ition as a basis for quota
allocation371, and notes the "significant trade-restrictiv e effects" of China's export performance
requirement, which make it "effectively impossible" for new entrants to obtain quota share. 372
Finally, Japan insists that China cannot have recour se to the quota eligibility or allocation criteria that
it expressly committed to eliminate as part of its WTO accession process, and which are significantly
more trade-restrictive than necessary.
5. Korea
199. Korea observes that the complainants "effectiv ely withdrew" their request to review the 2010
Chinese measures and requested the Panel to confine its review to the 2009 measures. 373 Korea notes
the "apparent discrepancy" between the Panel's st atement that it would look at the 2009 measures
only, and its subsequent references to the review of the "series of measures" acting in concert. 374

366Japan's third participant's submission, para. 92.
367Japan's third participant's submission, para. 94.
368See Japan's third participant's submission, para. 98 (referring to European Union's statement, second
written submission to the Panel, para. 206, referenced in Panel Reports, para. 7.293).
369Japan's third participant's submission, paras. 84 and 85 (referring to Panel Reports, para. 7.665).
370Japan's third participant's submission, para. 85 (referring to Panel Reports, para. 7.665).
371Japan's third participant's submission, para. 86.
372Japan's third participant's submission, para. 87.
373Korea's third participant's submission, para. 10.
374Korea's third participant's submission, para. 11.

According to Korea, it is not clear whether the "inh erent discretion" accorded to a panel permits such
a discrepancy.
375 In Korea's view, Article 19 of the DSU requires that only a measure found to be
inconsistent with a covered agreement can be the subject of a panel's recommendations; that is, a
recommendation should be "in parallel" with the challenged measure, and a panel only has the
"discretion" to "suggest" ways of implementing the recommendation. 376 Since the complainants'
deliberately chose to forego the "nexus-based" clai ms, Korea suggests that the Panel may not have
been "free to insert" the claim in the subsequent remedy phase of its analysis.377
200. Regarding the applicability of Article XX to inc onsistencies with Paragraph 11.3 of China's
Accession Protocol, Korea agrees with the Panel th at, if two legal provisions contain different
wording in the same article or treaty, they must be interpreted to have diffe rent meanings. However,
the "gravity" and importance of an "Article XX defense" suggests that "[m]ore explicit wording"
should have been used in this dispute to express the "relinquishment of such an important right". 378
Given the implications for other protocols of acces sion, China's appeal warrants "careful scrutiny". 379
Nonetheless, in Korea's view, the "difference in tone and nuance" between Paragraph 11.3 and
Paragraphs 11.1 and 11.2 of China's Accession Protocol, as well as the context of the other provisions
of Paragraph 11, supports the Pane l's ultimate conclusion in the pre sent dispute, and should be upheld
by the Appellate Body.380
201. Korea suggests that the Panel's finding under Articles X:3(a) and XI:1 of the GATT 1994,
that "vagueness" in the terms of a law or regulatio n can result in "as such" inconsistencies, requires
careful scrutiny. 381 With regard to the "operation capac ity" requirement under Article 19 of the
Export Quota Administration Measures , for example, the complainants claimed that the vagueness of
this term equates to "unlimited discret ion in contravention of the GATT 1994". 382 In EC – Selected
Customs Matters, however, the Appellate Body found that the mere showing of the existence of non-
uniform features, for example, is not sufficient to prove an inconsistency with Article X:3(a) of the
GATT 1994. Rather, the complainant must show that these features necessarily lead to non-uniform,
partial or unreasonable administration. Furthe rmore, "it seems undeniable" that China's export

375Korea's third participant's submission, para. 11.
376Korea's third participant's submission, para. 27.
377Korea's third participant's submission, para. 28.
378Korea's third participant's submission, para. 32.
379Korea's third participant's submission, para. 32.
380Korea's third participant's submission, para. 33.
381Korea's third participant's submission, p. 13, heading III.C.
382Korea's third participant's submission, para. 36 (referring to European Union's first written
submission to the Panel, paras. 165, 239-241, 320, and 348; and United States' first written submission to the
Panel, paras. 196 and 340).

licensing system includes "vague provisions" and t hus accords licence-issuing agencies "a significant
degree of discretion", which could result in export rest rictions inconsistent w ith Article XI:1 of the
GATT 1994.
383 However, when examining "legislativ e documents of a Member that contain
'discretionary' language" in the framework of an "as such" complaint, a panel should adopt a "cautious
approach" guided by the presumption, identified by the Appellate Body in US – Oil Country Tubular
Goods Sunset Reviews , "that WTO Members act in good faith in the implementation of their WTO
commitments".384 In the present dispute, Korea argues th at "it does not seem to be entirely clear"
whether the complainants presented sufficient evidence to overcome that "good faith" presumption.385
6. Saudi Arabia
202. Saudi Arabia contends that Article XX(g) of the GATT 1994 requires that the challenged
measure be applied jointly with domestic rest rictions on the production or consumption of an
exhaustible natural resource. The Panel, however, erred in finding that, in addition, the "purpose" of
the challenged measure must be to ensure the eff ectiveness of a domestic restriction on production or
consumption. Nothing in the text of Article XX( g) suggests such a finding. The Panel appears to
have been guided by the GATT panel report in Canada – Herring and Salmon , and Saudi Arabia
suggests that the Panel did so in e rror. The Appellate Body report in US – Gasoline did not endorse
the approach of the GATT panel in Canada – Herring and Salmon , and instead found that
Article XX(g) imposed only a re quirement of "even-handedness". 386 Saudi Arabia points out that, in
US – Gasoline , Venezuela and Brazil referred the Appellate Body to the relevant part of the GATT
panel report in Canada – Herring and Salmon, but that, nonetheless, the Appellate Body did not adopt
that panel's interpretation. In Saudi Arabia's view, the object and purpose of Article XX(g) will be
fulfilled if the restrictions imposed on foreign and domestically produced goods are applied jointly.
203. While taking no position on whether China's expor t licensing system is inconsistent with
Article XI of the GATT 1994, Saudi Arabia welcom es the Panel's finding that "non-automatic" export

383Korea's third participant's submission, para. 39.
384Korea's third participant's submission, para. 40 (quoting Appellate Body Report, US – Oil Country
385Korea's third participant's submission, para. 41. Enlarging the scope of its analysis beyond the
framework of Article XI:1, Korea also refers to the Appellate Body's statement in EC – Selected Customs
Matters that: "[i]n order to find that an administrative process has led to non-uniform administration of a
measure under Article X:3(a), a panel cannot merely rely on identifying the features of an administrative process
that it may view as non-uniform; a panel must go further and undertake an analysis to determine whether those
features of the administrative process neces sarily lead to non- uniform administration of a legal instrument of
the kind described in Article X:1." ( Ibid., para. 42 (quoting Appellate Body Report, EC – Selected Customs
Matters, para. 239 (original emphasis)))
386Saudi Arabia's third participant's submission, para. 22.

licensing systems are not inconsistent with this provision unless they create "a restriction or limiting
effect on … exportation".
387 In particular, Saudi Arabia agrees with the Panel's ultimate conclusions
that two types of export licensing systems are consis tent with Article XI:1: "(i) those in which
licences are granted upon application in all cases; and (ii) those which require the applicant to meet a
certain objective prerequisite" before being granted a licence. 388 However, the Panel's assertion that,
in addition to "quantitative restri ctions" Article XI also disciplin es "other measures", is "unclear"
because it does not specify whether those "oth er measures" must also restrict export quantities, or
whether they comprise "all applicable measur es" regardless of whether they limit quantities. 389 I n
Saudi Arabia's opinion, Article XI prohibits only "me asures that restrict, and are designed to restrict,
export quantities".390
204. Saudi Arabia reiterates its view, based on the panel report in China – Publications and
Audiovisual Products , that a licensing system is "discretionary" where the administering authority
enjoys "the freedom to choose, based essentially on it s own preference, whether or not such [licences]
are granted".391 A system in which export licences "are not 'granted in all cases', but which mandates
the authority's application of a 'hard-and-fast ru le' that limits the freedom of the administering
authority to determine whether to grant a licence", would not be discretionary and would therefore be
permissible under Article XI:1 of the GATT 1994.392
7. Turkey
205. Recalling the text of Paragraph 11.3 of China's Accession Protocol, Turkey notes that it
"openly refers" to Annex 6 and Ar ticle VIII as exceptions, and suggests that, had it been foreseen that

387Saudi Arabia's third participant's submission, para. 23 (quoting Panel Reports, para. 7.917).
Saudi Arabia notes that, although the Panel found that the Import Licensing Agreement provided "only limited
assistance" in interpreting Article XI of the GATT 1994 and therefore chose not to use the "standard
nomenclature" of "automatic", "non-automatic", and "dis cretionary", these terms help to create "a systematic
analytical framework for determining pe rmissible licensing under Article XI". ( Ibid., para. 24 (quoting Panel
Reports, paras. 7.911 and 7.915))
388Saudi Arabia's third participant's submission, pa ra. 24 (referring to Panel Reports, paras. 7.916
and 7.917).
389Saudi Arabia's third participant's submission, para. 26 (quoting Panel Reports, paras. 7.912
and 7.913).
390Saudi Arabia's third participant's submission, para. 29. (original emphasis)
391Saudi Arabia's third par ticipant's submission, para. 35 (quoting Panel Report, China – Publications
and Audiovisual Products, para. 7.324). See also Panel Report, Turkey – Rice, paras. 7.128, 7.133, and 7.134.
Based on this interpretation of the term "discretion" , Saudi Arabia agrees with the panel's findings in India –
Quantitative Restrictions that "India's licensing system for goods … is a discretionary import licensing system,
in that licences are not granted in all cases, but rather on unspecified 'm erits'". (Saudi Arabia's third participant's
392Saudi Arabia's third participant's submission, para. 37.

the exceptions in Article XX of the GATT 1994 woul d apply to Paragraph 11.3 of the Protocol, there
would have also been an "open referral" to Article XX.
393 Recalling China's argument that a
harmonious reading of Paragraph 11.3 of its Accession Protocol a nd Paragraph 170 of its Accession
Working Party Report would justify China's export duties, Turkey notes that the textual differences
between Paragraphs 11.3 and 5.1 of China's Accession Protocol may preclude this.
206. Regarding the interpretation of the words "tempor arily applied" in Article XI:2(a), Turkey
submits that temporarily applied measures are limited to measures that are: (i) applied for a
"determined and limited period of time"; (ii) predicted to last until a "certain date"; or (iii) predicted
to expire upon "the occu rrence of certain events".
394 For Turkey, the temporariness of the application
of the measure must be expected from the beginning of the application of the measure, and the
amount of time that the measure is intended to stay in place should be "foreseeable".
395 Furthermore,
Turkey maintains that there must be a "close link" between the temporary nature of the measure and
its objective to relieve or prevent a critical shor tage, and that therefore a measure applied under
Article XI:2(a) "should be capable" of preventing or relieving the shortage.396
III. Issues Raised on Appeal
207. The following issues are raised on appeal by China:
(a) whether the Panel erred in finding that S ection III of the complainants' panel requests
complies with the requirement in Article 6. 2 of the DSU to "provide a brief summary
of the legal basis of the complaint sufficient to present the problem clearly";
(b) whether the Panel acted inconsistently with Articles 7.1, 11, and 19.1 of the DSU by
recommending that China bring its export duty and export quota measures into
conformity with its WTO obligations such that the "series of measures" in force at the
date of the Panel's establishment do not ope rate to bring about a WTO-inconsistent
result;
(c) whether the Panel erred in finding that China may not have recourse to the exceptions
contained in Article XX of the GATT 1994 in order to justify a violation of China's
export duty commitments contained in Paragraph 11.3 of China's Accession Protocol;

393Turkey's third participant's submission, para. 8.
394Turkey's third participant's submission, para. 14.
395Turkey's third participant's submission, para. 14.
396Turkey's third participant's submission, para. 15.

(d) whether the Panel erred in its interpretation and application of Article XI:2(a) of the
GATT 1994, and in its assessment of the matter under Article 11 of the DSU, when it
found that China's export quota on refractory-grade bauxite is not "temporarily
applied" to prevent or relieve a "critical shortage";
(e) whether the Panel erred by interpreting the phrase "made effective in conjunction
with" in Article XX(g) of the GATT 1994 to require that the purpose of the export
restriction be to ensure the effectiveness of restrictions on domestic production and
consumption;
(f) whether the Panel erred in finding that China acts inconsistently with Paragraphs 1.2
and 5.1 of China's Accession Protocol, r ead in combination with Paragraphs 83
and 84 of China's Accession Working Party Report, by requiring exporters to comply
with prior export performance and minimum registered capital requirements in order
to obtain a quota allocation of certain raw materials;
(g) whether the Panel erred in its interpretation and application of Article X:3(a) of the
GATT 1994, and acted inconsistently with its obligations under Article 11 of the
DSU, in finding that the administration of the "operation capacity" criterion in
Article 19 of China's Export Quota Administration Measures is non-uniform and
unreasonable; and
(h) whether the Panel erred in its interpretati on and application of Article XI:1 of the
GATT 1994, and acted inconsistently with Article 11 of the DSU, in finding that
China's export licensing system is inconsistent with China's WTO obligations,
because it constitutes a restriction on exportation.
208. The following issues are raised on appeal by the United States:
(a) if the Appellate Body reverses the Panel's recommendations as requested by China on
appeal, then whether the Panel erred, unde r Articles 6.2, 7.1, 11, and 19.1 of the
DSU, in not making recommendations on the 2009 export quota and export duty
measures that were annually recurring and in effect at that time; and
(b) whether the Panel erred in finding that China's imposition of a bid-winning price on
the allocation of export quotas on bauxite, fl uorspar, and silicon carbide based on the

bid-winning price is not inconsistent w ith Article VIII:1(a) of the GATT 1994 or
Paragraph 11.3 of China's Accession Protocol.
209. The following issue is raised on appeal by the European Union:
(a) if the Appellate Body reverses the Panel's recommendations as requested by China on
appeal, and rejects the relevant other appeals submitted by the United States and
Mexico, then whether the Panel erred in fi nding that the European Union requested
the Panel not to make any findings and recommendations on the 2010 "replacement
measures" and thereby narrowed the Panel's terms of reference.
210. The following issues are raised on appeal by Mexico:
(a) if the Appellate Body reverses the Panel's recommendations as requested by China on
appeal, then whether the Panel erred, unde r Articles 6.2, 7.1, 11, and 19.1 of the
DSU, in not making recommendations on the 2009 export quota and export duty
measures that were annually recurring and in effect at that time; and
(b) whether the Panel erred in its interpretation and application of Article X:3(a) of the
GATT 1994, and acted inconsistently with Ar ticle 11 of the DSU, in finding that the
participation of China's Chamber of Comme rce of Metals, Minerals and Chemicals
Importers and Exporters (the "CCCMC") in China's export quota allocation process is
not partial or unreasonable.
IV. The Panel's Terms of Reference
211. We begin by examining China's appeal of the Panel's finding that Section III of the
complainants' panel requests
397, entitled "Additional Restraints Imposed on Exportation", identifies
the measures and claims at issue in a manner suffi cient to present the problem clearly, as required
under Article 6.2 of the DSU. China requests the Appe llate Body to reverse this finding, and to find
instead that Section III of the panel requests does not comply with Article 6.2 of the DSU, with the

397Request 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); Request for the Establishment of a
Panel by Mexico (WT/DS398/6). The panel requests are attached to these Reports as Annexes I-III,
respectively.

exception of the complainants' claims under Article X:1 of the GATT 1994 regarding the
non-publication of the total amount and procedure for the allocation of the zinc export quota.
398
212. Before turning to assess China's claim of error under Article 6.2 of the DSU, we consider it
useful to describe briefly how this issue arose befo re the Panel, as well as the Panel's approach to the
issue.
A. Proceedings before the Panel and the Panel's Findings
213. On 4 November 2009, the United States, the European Communities, and Mexico filed the
panel requests that form the basis of the present dis pute. At the request of the complainants, the DSB
established a single panel pursuant to Article 9.1 of the DSU at its 21 December 2009 meeting. At
this DSB meeting, China informed the DSB of its intention to seek a preliminary ruling on the
adequacy of the complainants' panel requests a nd their consistency with the requirements of
Article 6.2 of the DSU. 399 On 31 March 2010, one day after Pa nel composition, China submitted a
request for a preliminary ruling by the Panel. 400 China contended that the panel requests did not
comply with the requirements of Article 6.2 of the DSU because they failed to provide "a brief

398See China's appellant's submission, paras. 97 and 98 (referring to Panel Reports, para. 7.3(b); and
second phase of the Preliminary Ruling by the Panel dated 1 October 2010, Panel Reports, Annex F-2 (the
"Panel's preliminary ruling (s econd phase)"), para. 77). As a consequence of this reversal, China also requests
the Appellate Body to reverse the Panel's findings regarding claims made by the complainants on the basis of
Section III of the panel requests, including the findings in paragraphs 7.669, 7.670, 7.678, 7.756, 7.807, 7.958,
7.1082, 7.1102, 7.1103, 8.4(a)-(b), 8.5(b), 8.6(a)-(b), 8.11(a), (c), (e), and (f), 8.12(b), 8.13(a)-(b), 8.18(a)-(b),
8.19(b), and 8.20(a)-(b) of the Panel Reports. (China's appellant's submission, para. 98) Although China
includes paragraph 8.11(f) of the Panel Reports in its request for reversal, we note that this finding concerns the
failure to publish the total amount and procedure for the allocation of the zinc export quota, which China
specifically excludes from its appeal in its appellant's submission.
399WT/DSB/M/277, para. 74; see also Panel Reports, para. 1.10. The intervention of the representative
of China at the 21 December 2009 regular meeting of th e DSB is reflected as follows in the minutes of the
meeting:
The representative of China said that … Section III of the Complainants'
Panel Requests, titled "Additional Restraints Imposed on Exportation",
described various "complaints", and listed 37 "measures", along with
13 treaty provisions. However, the requests had failed to make any
connection between: (1) the "complai nts" and the "measures"; (2) the
"measures" and the treaty provisions; an d, (3) the treaty provisions and the
"complaints". As a result, the complainants' requests were "[in]sufficient to
present the problem clearly", within the meaning of Article 6.2 of the DSU.
In those and other respects, the three complainants had prejudiced China's
ability to prepare its defence. Since the complainants wished to proceed
with panel establishment, China woul d seek a preliminary ruling on the
requests' consistency with Article 6.2 of the DSU.
400Communication from China to the Panel: China's request for a preliminary ruling pursuant to
Article 6.2 of the DSU, 30 March 2010 ("China's request for a preliminary ruling"); Panel Reports, para. 1.11.

summary of the legal basis of the complaint sufficient to present the problem clearly".
401 In particular,
with respect to Section III of the panel requests, China alleged that the requests failed to "plainly
connect": (i) the narrative paragraphs and the 37 lis ted measures; (ii) the 37 listed measures and the
13 listed treaty provisions; and (iii) the 13 listed treaty provisions and the narrative paragraphs.402
214. On 21 April 2010, the complainants submitted a joint response to China's request for a
preliminary ruling.403 In their joint response, the complainants argued that Section III of their panel
requests starts by providing a narrative descripti on of the additional restraints on exportation,
"identifies the relevant Chinese measures", and i ndicates that the complainants considered "the
identified measures to be inconsistent with the enumerated legal obligations". 404 F o r t h e
complainants, this was "sufficient to connect the relevant measures with the legal obligations".405 The
complainants did not provide additional information at that stage of the proceedings. The Panel held a
meeting with the parties, as well as a separate session with the third parties, on 29 April 2010.406
215. The Panel issued a preliminary ruling in two phases 407 responding to China's allegation that
Section III of the complainants' panel requests fa iled to comply with Article 6.2 of the DSU. 408 The
first phase of the preliminary ruling was issued to the parties on 7 May 2010 and circulated to WTO
Members on 18 May 2010.
409 The Panel stated that "the sufficiency of a panel request 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." 410 Accordingly, the Panel
decided to "reserve its decision" on whether Secti on III of the complainants' panel requests satisfied
the requirements of Article 6.2 of the DSU until after it had examined the parties' first written
submissions and was "more able to take fully into account China's ability to defend itself". 411 In so
doing, the Panel referred to an "undertaking from a re presentative" of the complainants to the effect
that "all possible concerns over the undefined scope of their challenge [would] be answered once

401China's request for a preliminary ruling, paras. 3 and 30.
402China's request for a preliminary ruling, para. 50.
403Joint Communication from the United States, the European Union, and Mexico to the Request for a
Preliminary Ruling submitted by China, 21 April 2010 (t he "complainants' response to China's request for a
404Complainants' response to China's request for a preliminary ruling, para. 30.
405Complainants' response to China's request for a preliminary ruling, para. 30.
406Panel Reports, para. 1.11.
407The first and second phases of th e preliminary ruling were attached as Annexes F-1 and F-2 to the
Panel Reports. (See Panel Reports, paras. 1.12 and 1.13)
408Panel Reports, para. 1.12.
409WT/DS394/9, WT/DS395/9, WT/DS398/8.
410Panel's preliminary ruling (first phase), para. 37.
411Panel's preliminary ruling (first phase), para. 39.

China and the Panel receive[d] the Complainants' first written submissions".
412 The Panel added that
it was not saying that "all flaws in a panel request can be cured by a first written submission". 413 The
Panel also said that it "expect[ed] that the Co mplainants [would] clarify in their first written
submissions which of the listed measures (or group thereof) for which specific products (or group
thereof) are inconsistent with which specific WTO obligations among those listed in the last part of
Section III of their panel requests".414
216. On 6 September 2010, following the first Panel meeting, the Panel requested the complainants
to list all the measures for which they were seeking recommendations and which WTO provisions
each of these measures was alleged to violate. 415 In response, the complainants submitted, on 13
September 2010, a chart setting out, in three column s, the type of "Export Restraint" involved, the
respective "Measures, i.e., Legal Instruments" implicated, and the "WTO Provisions Violated" by
each measure. Subsequently, on 1 October 2010, the Panel issued the second phase of its preliminary
ruling, where it noted that the complainants "did not directly address in their submissions or in their
subsequent oral statements" the question of whet her Section III of the complainants' panel requests
complied with Article 6.2 of the DSU. 416 Nonetheless, the Panel ultimately concluded that "the
complainants' first written submission[s] set out sufficient connections between the challenged
measures and certain violations attributed to such measures." 417 In reaching this conclusion, the Panel
based itself on information contained in the charts fi led by the complainants in response to a question
posed by the Panel following the first Panel meeting. 418 At the second Panel meeting on
22 November 2010, the United States, in order "[t]o clarify any confusion" 419, attached to its opening
statement a revised chart specifying the measures on which it was seeking a finding by the Panel.420
217. The Panel's preliminary ruling was incorporated without changes or additional reasoning into
the final Panel Reports. 421 Ultimately, the Panel rejected China's claim that Section III of the
complainants' panel requests failed to provide "a br ief summary of the legal basis of the complaint

412Panel's preliminary ruling (first phase), para. 38.
413Panel's preliminary ruling (first phase), para. 39.
414Panel's preliminary ruling (first phase), para. 46.
415Panel Question 2 following the first Panel meeting.
416Panel's preliminary ruling (second phase), para. 32.
417Panel's preliminary ruling (second phase), para. 65.
418See Panel's preliminary ruling (second phase), para . 66: "Indeed, the complainants clarified the
connection of the measures at hand w ith the specific claims in their resp onses to question No. 2 posed by the
Panel" after the first Panel meeting.
419United States' opening statement at the second Panel meeting, para. 128.
420Revised Chart B in response to Panel Question 2 submitted by the United States following the
second Panel meeting (Panel Exhibit US-1).
421Panel Reports, Annex F; see also paras. 7.1-7.4.

sufficient to present the problem clearly". The Pane l concluded that, with the exception of one claim
of the European Union, "[t]he complainants' Panel Requests, as clarified by their first submissions,
provide sufficient connection between the measures listed in Section III and the listed claims of
violations".
422
B. Whether Section III of the Complainant s' Panel Requests Complies with the
Requirements of Article 6.2 of the DSU
218. Article 6.2 of the DSU provides, in relevant part:
The request for the establishment of a panel shall be made in writing.
It shall indicate whether consultations were held, identify the specific
measures at issue and provide a brief summary of the legal basis of
the complaint sufficient to present the problem clearly.
219. The Appellate Body has explained that Article 6.2 of the DSU serves a pivotal function in
WTO dispute settlement and sets out two key requirements that a complainant must satisfy in its panel
request, namely, the "identification of the specific measures at issue, and the provision of a brief
summary of the legal basis of the complaint (or the claims)".
423 Together, these two elements
constitute the " matter referred to the DSB", so that, if either of them is not properly identified, the
matter would not be within th e panel's terms of reference. 424 Fulfilment of these requirements,
therefore, is "not a mere formality". 425 As the Appellate Body has noted, a panel request forms the
basis for the terms of refere nce of panels, in accordance with Article 7.1 of the DSU. 426 Moreover, it
serves the due process objective of notifying the res pondent and third parties of the nature of the
complainant's case.427 The identification of the specific measures at issue and the provision of "a brief
summary of the legal basis of the complaint suffi cient to present the problem clearly" are therefore
central to defining the scope of the dispute to be addressed by the panel.
220. In order to determine whether a panel request is sufficiently precise to comply with
Article 6.2 of the DSU, a panel must scrutinize car efully the language used in the panel request. 428

422Panel Reports, para. 7.3(b).
423Appellate Body Report, US – Carbon Steel, para. 125. (emphasis omitted)
424Appellate Body Report, US – Carbon Steel, para. 125. (emphasis added)
426See Appellate Body Report, Guatemala – Cement I, paras. 72 and 73; Appellate Body Report, US –
Carbon Steel , para. 125; Appellate Body Report, US – Continued Zeroing , para. 160; and Appellate Body
Report, US – Zeroing (Japan) (Article 21.5 – Japan), para. 107.
427Appellate Body Report, EC and certain member States – Large Civil Aircraft , para. 786; see also
paras. 639 and 640 (referring to Appellate Body Report, US – Carbon Steel , para. 126, in turn referring to
Appellate Body Report, Brazil – Desiccated Coconut, p. 22, DSR 1997:I, 167, at 186).
428See Appellate Body Report, EC – Fasteners (China), para. 562.

This involves a case-by-case analysis. Submissions by a party may be referenced in order to confirm
the meaning of the words used in the panel request; but the co ntent of those submissions "cannot
have the effect of curing the failings of a deficient panel request".
429 For example, whether a panel
request identifies the "specific measures at issue" may depend on the particular context in which those
measures operate and may require ex amining the extent to which they are capable of being precisely
identified.430 At the same time, whether a panel requ est challenging a number of measures on the
basis of multiple WTO provisions sets out "a brief summary of the legal basis of the complaint
sufficient to present the problem clearly" may depend on whether it is sufficiently clear which
"problem" is caused by which measure or group of measures. The Appellate Body has explained that,
in order "to present the problem clearly", a pane l request must "plainly connect the challenged
measure(s) with the provision(s) of the covere d agreements claimed to have been infringed".
431
Furthermore, to the extent that a provision contains not one single, distinct obligation, but rather
multiple obligations, a panel request might need to specify which of the obligations contained in the
provision is being challenged.432 In our view, a defective panel request may impair a panel's ability to
perform its adjudicative function within the strict timeframes contemplated in the DSU and, thus, may
have implications for the prompt settlement of a dispute in accordance with Article 3.3 of the DSU. A
complaining Member should therefore be particul arly vigilant in preparing its panel request,
especially when numerous measures are challenged under several different treaty provisions.
221. With these considerations in mind, we turn to th e panel requests at issue in this dispute. We
note that the complainants' panel requests are each structured in three separate sections. Section I,
entitled "Export Quotas", challenges the imposition of export quotas on bauxite, coke, fluorspar,
silicon carbide, and zinc as inconsistent with Ar ticle XI:1 of the GATT 1994 and Paragraphs 162
and 165 of the Report of the Working Party on the Accession of China
433 ("China's Accession
Working Party Report"). In Section II, entitled "E xport Duties", the complainants claim that China
imposes export duties on bauxite, coke, fluorspar, magnesium, manganese, silicon metal, yellow
phosphorous, and zinc in violation of its commitmen ts under Paragraph 11.3 of the Protocol on the
Accession of the People's Republic of China to the WTO
434 ("China's Accession Protocol"). Whereas

429Appellate Body Report, EC – Fasteners (China), para. 562 (referring to Appellate Body Report, EC
and certain member States – Large Civil Aircraft , para. 642; Appellate Body Report, EC – Bananas III ,
430Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 641.
431Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 162.
432See Appellate Body Report, Korea – Dairy , para. 124. See also Appellate Body Report, EC –
Fasteners (China), para. 598.
433WT/ACC/CHN/49 and Corr.1.
434WT/L/432.

Sections I and II each addresses a single form of export restriction, Section III covers a wider set of
allegations directed at what is referred to in th e title of Section III as "Additional Restraints Imposed
on Exportation".
222. The introductory paragraph in Section III states, in broad terms, that "China imposes other
restraints on the exportation of the materials, administers its measures in a manner that is not uniform,
impartial, and reasonable, imposes excessive fees and formalities on exportation, and does not publish
certain measures pertaining to requirements, restric tions, or prohibitions on e xports." This paragraph
is followed by five separate paragraphs in the case of the United States and Mexico, and
six paragraphs in the case of the European Union, se tting out different allegations of violation relating
to varied situations in which obligations under th e WTO agreements might not be satisfied, namely,
allegations relating to the administration of export quotas, allocation of export quotas, publication of
export quota amounts and application procedures, export licensing requirements, minimum export
price requirements, and fees and formalities.
223. Each of these paragraphs briefly describes a number of different allegations of violation
relating to different types of restraints. These narra tive paragraphs are worded in virtually identical
terms in each of the three panel requests. They state:
China administers the export quotas imposed on bauxite, coke,
fluorspar, silicon carbide, and zinc discussed in Section I above,
through its ministries and other organizations under the State Council
as well as chambers of commerce and industry associations, in a
manner that restricts exports a nd is not uniform , impartial and
reasonable. In connection with th e administration of the quotas for
these materials, China imposes restrictions on the right of Chinese
enterprises as well as foreign enterprises and individuals to export.
China allocates the export quotas imposed on bauxite, fluorspar, and
silicon carbide discussed in Section I above, through a bidding
system. China administers the requirements and procedures for this
bidding system through its ministries and other organizations under
the State Council as well as chambers of commerce and industry
associations, in a manner that restricts exports and is not uniform,
impartial and reasonable. In conn ection with the administration of
this bidding system, China also requires foreign-invested enterprises
to satisfy certain criteria in order to export these materials that
Chinese enterprises need not satis fy. [Further, China requires
enterprises to pay a charge in order to export these materials that is
excessive and imposes excessive formalities on the exportation of
these materials.*]

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.
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, fluorspar, silicon
carbide, and zinc in connection with the administration of the export
quotas discussed in Section I, as an additional restraint on the
exportation of those materials.
China also imposes quantitative restri ctions on the exportation of the
materials by requiring that prices for the materials meet or exceed a
minimum price before they may be exported. Further, through its
ministries and other organizations under the State Council as well as
chambers of commerce and industry associations, China administers
the price requirements in a manner that restricts exports and is not
uniform, impartial, and reasonable. China also does not publish
certain measures relating to these requirements in a manner that
enables governments and traders to become acquainted with them.
[China also imposes excessive fees and formalities in relation to the
exportation of the materials.**]
[*This sentence is contained in the panel requests of the
United States and Mexico only.]
[**This sentence is contained in the panel request of the
European Union only.]
224. Following these narrative paragraphs, each of the three panel requests provides an identical
bullet point list of 37 legal instruments, introdu ced by the phrase: "[The complainant] understands
that these Chinese measures are reflected in, among others: …" 435 The legal instruments listed range
from entire codes or charters (such as the Forei gn Trade Law of the People's Republic of China 436
(China's "Foreign Trade Law")) to specific administrative measures (such as the Quotas of Fluorspar

435While the phrase introducing the 37 legal instruments refers to "these Chinese measures" in a manner
that might suggest that the complainants regarded the text of the narrative paragraphs as setting forth the
measures at issue, the subsequent submissions clarified the meaning of the word "measures" as a synonym for
the 37 legal instruments. In fact, in its response to Panel Question 2 fo llowing the first Panel meeting, the
United States and Mexico refe rred to them as "Measures, i.e., Legal Instruments" and the European Union as
"Measures/Legal instruments".
436Foreign Trade Law of the People's Republic of China, adopted at the 8th Session of the Standing
Committee of the Tenth National People's Congress on 6 April 2004, 1 July 2004 (Panel Exhibits CHN-151 and
JE-72).

Lump (Powder) of 2009
437 ("2009 First Round Fluorspar Bidding Procedures ")). The complainants'
panel requests do not identify specific sections or provisions of any of the listed instruments.
225. The final paragraph of Section III of the pane l requests consists of a list of 13 treaty
provisions. The United States and Mexico state that they consider that "these measures are
inconsistent with Article VIII:1(a) and VIII:4, Article X:1 and X:3(a), and Article XI:1 of the
GATT 1994 and paragraphs 2(A)2, 5.1, 5.2 and 8.2 of Part I of the Accession Protocol, as well as
China's obligations under the provisions of paragrap h 1.2 of Part I of the Accession Protocol, which
incorporates commitments in paragraphs 83, 84, 162, and 165 of the Working Party Report." 438 The
final paragraph in Section III of the European Union' s panel request is textually identical, except that
it refers to Article VIII:1 of the GATT 1994 instead of Article VIII:1(a) of the GATT 1994.
226. China does not contest that Section III of the panel requests identifies the challenged
measures with sufficient specificity to comply with Ar ticle 6.2 of the DSU. Rather, at issue here is
whether Section III provides "a brief summary of the legal basis of the complaint sufficient to present
the problem clearly". As the Appellate Body found in EC – Selected Customs Matters , a brief
summary of the legal basis of the complaint as required by Article 6.2 of the DSU should "explain
succinctly how or why the measure at issue is considered by the complaining Member to be violating
the WTO obligation in question".
439 Based on our reading of the co mplainants' panel requests in the
present case, it is not clear which allegations of error pertain to which particular measure or set of
measures identified in the panel requests. Furthe rmore, it is unclear whether each of the listed
measures relates to one specific allegation described in the narrative paragraphs, or to several or even
all of these allegations, and whether each of th e listed measures allegedly violates one specific
provision of the covered agreements, or several of them.440
227. First, the complainants iden tify, for instance, China's Foreign Trade Law as a measure at
issue. Yet from the language of Section III of the panel requests it is impossible to discern which of
the several allegations of violation described in the narrative paragraphs is alleged to have been

437Quotas of Fluorspar Lump (Powder) of 2009, Committee for the Invitation for bid for Export
Commodity Quotas, 10 December 2008 (Panel Exhibit JE-93).
438See, for example, United States' panel request, p. 9.
439Appellate Body Report, EC – Selected Customs Matters, para. 130.
440As noted supra, para. 211, China does not argue that th e claim regarding the non-publication of the
zinc export quota fails to comply with Article 6.2 of th e DSU. Moreover, as this claim concerns a failure to
publish a measure, we consider that the language in th e fourth narrative paragraph of Section III of the panel
requests, together with the listing of Article X:1 of the GATT 1994 in Section III, satisfies the requirements of
Article 6.2 of the DSU.

caused by the Foreign Trade Law, or which provision or provisions of the covered agreements listed
in the concluding paragraph are alleged to have been violated by that measure.
228. Second, the WTO provisions listed in Sec tion III contain a wide array of dissimilar
obligations.
441 More specifically, the complainants state that they consider that "these measures are
inconsistent with Article VIII:1(a) 442 and VIII:4, Article X:1 and X:3(a), and Article XI:1 of the
GATT 1994 and paragraphs 2(A)2, 5.1, 5.2 and 8.2 of Part I of the Accession Protocol, as well as
China's obligations under the provisions of paragrap h 1.2 of Part I of the Accession Protocol, which
incorporates commitments in paragraphs 83, 84, 162, and 165 of the Working Party Report." China's
obligations under these various provi sions are quite diverse and therefore it cannot be discerned what
the particular "problem" is under Article 6.2 of the DSU with respect to the legal instruments listed in
Section III.
229. Third, the narrative paragraphs describe in a general manner different allegations of error
related to different types of restraints, and do not make clear which measures, or which groups of
measures acting collectively, are alleged to be in consistent with which treaty provisions. For
example, the second narrative paragraph of the co mplainants' panel request s states that "China
administers the export quotas … through its ministries and other organizations under the State
Council as well as chambers of commerce and industry associations, in a manner that restricts exports
and is not uniform, impartial and reasonable" and alleges th at, "[i]n 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 individuals to export".
443 This language, when read
together with the legal instruments identified in the panel requests and the WTO provisions identified
in Section III, groups together disparate problems arising under different treaty provisions.

441See Appellate Body Report, Korea – Dairy, para. 124.
442We note that, in its panel request, the European Union invokes more broadly Article VIII:1 of the
GATT 1994.
443The second narrative paragraph of Section III of th e complainants' panel requests reads in full as
follows:
China administers the export quotas imposed on bauxite, coke, fluorspar,
silicon carbide, and zinc discussed in S ection I above, through its ministries
and other organizations under the State Council as well as chambers of
commerce and industry associations, in a manner that restricts exports and is
not uniform, impartial and reason able. 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
individuals to export.

230. As the Appellate Body has explained, a claim must be presented in a manner that presents the
problem clearly within the meaning of Article 6.2.
444 We do not consider this to have been the case
here, where Section III of the complainants' panel re quests refers generically to "Additional Restraints
Imposed on Exportation" and raises multiple proble ms stemming from several different obligations
arising under various provisions of the GATT 1994, China's Accession Protocol, and China's
Accession Working Party Report. Neither the titl es of the measures nor the narrative paragraphs
reveal the different groups of measures that are alle ged to act collectively to cause each of the various
violations, or whether certain of the measures is c onsidered to act alone in causing a violation of one
or more of the obligations.
231. Like the Panel, we do not read Section III of the complainants' panel requests as advancing all
claims, under all treaty provisions, with respect to all measures. Instead, it appears to us that the
complainants were challenging some (groups of) me asures as inconsistent with some (groups) of the
listed WTO obligations. 445 In the present case, the combination of a wide-ranging list of obligations
together with 37 legal instruments ranging from China's Foreign Trade Law to specific administrative
measures applying to particular products is such that it does not allow the "problem" or "problems" to
be discerned clearly from the panel requests. Because the complainants did not, in either the narrative
paragraphs or in the final listing of the provisions of the covered agreements alleged to have been
violated, provide the basis on which the Panel and Ch ina could determine with sufficient clarity what
"problem" or "problems" were alleged to have been caused by which measures, they failed to present
the legal basis for their complaints with sufficient clarity to comply with Article 6.2 of the DSU.
232. With respect to the consequences of the failure to comply with the requirements of Article 6.2
of the DSU, the participants disagree as to whet her the Panel frustrated China's due process rights
under that provision. China alleges that, when the pa nel requests were filed, it was not able to begin
preparation of its defence with respect to the cl aims listed in Section III of the panel requests,
"because the measures implicated by the different narrative paragraphs, and the claims made
regarding those measures, could not be identified".
446 The European Union responds that China
"effectively and exhaustively" defended all the claims made by the complainants in its first written
submission to the Panel, and that this demons trates that China's due process rights were not
compromised.447 Referring to China's statement that the co mplainants have made "several subsets of

444See Appellate Body Report, EC – Fasteners (China), para. 597.
445Panel's preliminary ruling (first phase), para. 36.
447European Union's appellee's submission, para. 25.

claims with respect to several subsets of measures affecting several subsets of product categories"
448,
the United States and Mexico argue that China was aw are of "both the possible and likely claims that
the Co-Complainants could advance against it".449
233. The Appellate Body has clarified that due process "is not constitutive of, but rather follows
from, the proper establishment of a panel's jurisdiction". 450 We find it troubling therefore that the
Panel, having correctly recognized that a deficien t panel request cannot be cured by a complaining
party's subsequent written submissions, nonetheless d ecided to "reserve its decision" on whether the
panel requests complied with the requirements of Artic le 6.2 until after it had examined the parties'
first written submissions and was "more able to take fully into account China's ability to defend
itself".451 The fact that China may have been able to defend itself does not mean that Section III of
the complainants' panel requests in this dispute comp lied with Article 6.2 of the DSU. In any event,
compliance with the due process objective of Artic le 6.2 cannot be inferred from a respondent's
response to arguments and claims found in a compla ining party's first written submission. Instead, it
is reasonable to expect, in our view, that a rebu ttal submission would address arguments contained in
the complaining party's first written submission. We also find it troubling that the second phase of the
Panel's preliminary ruling came only at an advanced stage in the proceedings, on 1 October 2010.
234. In the light of the failure to provide suffici ently clear linkages between the broad range of
obligations contained in Articles VIII:1(a), V III:4, X:1, X:3(a), and XI:1 of the GATT 1994,
Paragraphs 2(A)2, 5.1, 5.2, and 8.2 of Part I of China's Accession Protocol, and Paragraphs 83, 84,
162, and 165 of China's Accession Working Party Re port, and the 37 challenged measures, we do not
consider that Section III of the complainants' panel requests satisfies the requirement in Article 6.2 of
the DSU to provide "a brief summary of the lega l basis of the complaint sufficient to present the
problem clearly".
235. Consequently, we find that the Panel erred under Article 6.2 of the DSU in making findings
regarding claims allegedly identified in Section III of the complainants' panel requests. We therefore
declare moot and of no legal effect the Panel's findings in paragraphs 8.4(a)-(d), 8.11(a)-(e),
and 8.18(a)-(d) in respect of claims concerni ng export quota administra tion and allocation;
paragraphs 8.5(a)-(b), 8.12(a)-(b), and 8.19(a)-(b) in respect of cl aims concerning export licensing

448Joint appellees' submission of the United States and Mexico, para. 57 (referring to China's comments
on the complainants' joint response to China's request for a preliminary ruling, para. 49).
449Joint appellees' submission of the United States and Mexico, para. 57.
450Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 640.
451Panel's preliminary ruling (first phase), para. 39.

requirements; paragraphs 8.6(a )-(b), 8.13(a)-(b), and 8.20(a)-(b) in respect of claims concerning a
minimum export price requirement; and paragraphs 8. 4(e) and 8.18(e) of the Panel Reports in respect
of claims concerning fees and formalities in connec tion with exportation. In these circumstances, we
have no basis to consider further the arguments raised by China in its appeal and by the complainants
in their other appeals regarding these findings.
V. The Panel's Recommendations
236. We now turn to address China's appeal rega rding the Panel's recommendations concerning
export duties and export quotas.
237. China seeks review of the Panel's recommendations "to the extent that they apply to annual
replacement measures" adopted after the establishment of the Panel on 21 December 2009.
452 China
argues that the complainants had excluded such measures from the scope of the dispute and, hence, by
making recommendations extending to such measures, the Panel acted inconsistently with its
obligations under Article 7.1 of the DSU; failed to make an objective assessment of the matter under
Article 11 of the DSU; and made recommendations on measures that were not part of the matter,
inconsistently with Article 19.1 of the DSU. 453 In response, the United States, the European Union,
and Mexico argue that the Panel's recommendati ons were correctly made in accordance with
Articles 7.1, 11, and 19.1 of the DSU on the measures challenged by the complainants as they existed
at the time of the Panel's establishment. The Un ited States and Mexico posit that, without such
recommendations, "trade measures imposed in part through annually recurring legal instruments could
never be successfully challenged through WTO dispute settlement". 454 The European Union adds that
"this is not the proper forum to determine the actions China should take in order to bring itself into
compliance with its WTO obligations"; rather, China should follow the procedures provided for
under Article 21 of the DSU in order to identify the scope of its compliance obligations.
455
238. The Panel included the following paragraph in th e final section of its Reports, setting out its
conclusions and recommendations:
Pursuant to Article 19.1 of the DSU, having found that China has
acted inconsistently with Articles X:1, X:3(a) and XI:1 of the
GATT 1994; Paragraphs 1.2, 5.1 and 11.3 of China's Accession
Protocol; and Paragraphs 83 and 84 of China's Working Party Report,

453China's appellant's submission, section III.D.2.
454Joint appellees' submission of the United States and Mexico, para. 72.
455European Union's appellee's submission, para. 43.

the Panel recommends that the Dispute Settlement Body requests
China to bring the existing measures at issue into conformity with its
obligations under the GATT 1994, China's Accession Protocol and
China's Working Party Report. The Panel makes no recommendation
on expired measures, namely the 2009 measures at issue and pre-
2009 MEP-related measures. In respect of findings concerning
export duties and export quotas, the Panel found that the series of
measures operating collectively h as resulted in the imposition of
export duties or export quotas that are inconsistent with China's
WTO obligations. The Panel, therefore, recommends that the
Dispute Settlement Body requests China to bring its measures into
conformity with its WTO obligations such that the "series of
measures" does not operate to br ing about a WTO-inconsistent
result.
456
239. Before turning to address China's arguments on a ppeal, we consider it useful to describe the
procedural context in which this issue arose and to outline the multiple steps in the Panel's analysis
that led it to make findings and recommendations on a "series of measures".
A. Proceedings before the Panel and the Panel's Findings
240. Before the Panel, the complainants alleged that China has acted inconsistently with its WTO
obligations by imposing export quotas on certain forms of bauxite 457, coke, fluorspar, silicon carbide,
and zinc; and export duties on certain forms of bauxite, coke, fluorspar, magnesium, manganese,
silicon metal, and zinc. 458 The Panel found that these export restrictions were not introduced through
a single legal instrument, but rather resulted from the application of several measures operating
together.459 For each product, this group of measures, or "series of measures" as the Panel referred to
it, consisted of standing framew ork legislation and implementing regulations, as well as a specific
legal instrument or instruments identifying the individual export quotas or export duties imposed on a
specific product during a particular timeframe, usually one year. 460 For example, the Panel found that
China imposed an export quota on certain forms of bauxite in 2009 461 through China's Foreign Trade
Law, Regulation of the People's Republic of China on the Administration of the Import and Export of

456Panel Reports, paras. 8.8, 8.15, and 8.22. The Panel made the same recommendation with respect to
each of the complainants.
457Three forms of bauxite are at issue in this disput e: refractory-grade ba uxite (Harmonized System
("HS") number 2508.3000), aluminium ores and concentrates (HS number 2606.0000), and aluminium ash and
residues (HS number 2620.4000).
458See Panel Reports, paras. 3.2, 3.3, 7.59-7.63 , and 7.172-7.201. The export duty on yellow
phosphorous was also challenged, but the Panel found that this duty was no longer in effect at the time of the
Panel's establishment. (See infra, footnote 553)
459Panel Reports, paras. 7.68 and 7.218.
460Panel Reports, paras. 7.76, 7.80, 7.84, 7.88, 7.92, 7.97, 7.101, and 7.219-223.
461See Panel Reports, para. 7.219.

Goods
462 ("Regulation on Import and Export Administration"), Measures of Quota Bidding for Export
Commodities463 ("Export Quota Bidding Measures "), Measures for the Administration of Licence for
the Export of Goods 464 (" 2008 Export Licence Administration Measures "), Announcement of the
Ministry of Commerce Issuing the "2009 Graded Licence-Issuing List of Commodities Subject to
Export Licence Administration" 465 (" 2009 Graded Export Licensing Entities Catalogue "), Working
Rules on Issuing Export Licences466 ("2008 Export Licensing Working Rules "), Implementation Rules
of Export Quota Bidding for Industrial Products 467 ("Export Quota Bidding Implementation Rules "),
Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial Products 468 (" 2009
Export Quota Amounts"), Announcement on the Second Invitation for the Bidding of Select Industrial
Product Export Quotas in 2009 469 (" 2009 Announcement of Second Bidding Round for Talc and
Silicon Carbide"), Notice "2009 Export Licensing Management Commodities List" 470 ("2009 Export
Licensing Catalogue "), Announcement of Ministry of Co mmerce on Matters regarding the First
Bidding for Export Quotas of Industrial Products in 2009471 ("2009 First Round Export Quota Bidding
Announcement"), Announcement of Ministry of Commerce on the Notice for the Second Invitation
for the Bidding for Industrial Product Export Quotas in 2009 472 ("2009 Second Round Export Quota

462Regulation of the People's Republic of China on the Administration of the Import and Export of
Goods, passed at the forty-sixth executive meeting of the State Council on 31 October 2001, 1 January 2002
(Panel Exhibits CHN-152 and JE-73).
463Measures of Quota Bidding for Export Commodities, Decree of the Ministry of Foreign Trade and
Economic Cooperation No. 11, adopted at the 9th ministerial office meeting of the Ministry of Foreign Trade
and Economic Co-operation, 1 January 2002 (Panel Exhibits CHN-304 and JE-77).
464Measures for the Administration of Licence for the Export of Goods, Order of the Ministry of
Commerce (2008) No. 11, 1 July 2008 (Panel Exhibits CHN-342 and JE-74).
465Announcement of the Ministry of Commerce Issuing the "2009 Graded Licence-Issuing List of
Commodities Subject to Export Licence Administration" , Ministry of Commerce, Notice (2008) No. 124,
1 January 2009 (Panel Exhibit JE-96).
466Working Rules on Issuing Export Licences, Minist ry of Commerce, Shangp eifa (2008) No. 398,
9 October 2008 (Panel Exhibits CHN-344 and JE-97).
467Implementation Rules of Export Quota Bidding for Industrial Products, Ministry of Foreign Trade
and Economic Cooperation, 8 November 2001 (Panel Exhibits CHN-305 and JE-78).
468Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial Products, Ministry of
Commerce, Notice (2008) No. 83, 1 January 2009 (Panel Exhibit JE-79).
469Announcement on the Second Invitation for the Bidding of Select Industrial Product Export Quotas
in 2009, Committee for the Invitation for bid for Export Commodity Quotas, 16 September 2009 (Panel Exhibit
JE-132).
470Notice "2009 Export Licensing Management Commodities List", Ministry of Commerce and
General Administration of Customs, Notice (2008) No. 100, 1 January 2009 (Panel Exhibits CHN-6 and JE-22).
471Announcement of Ministry of Commerce on Matters regarding the First Bidding for Export Quotas
of Industrial Products in 2009, Ministry of Commerce, Announcement (2008) No. 85, 30 October 2008 (Panel
Exhibits CHN-309 and JE-90).
472Announcement of Ministry of Commerce on the Notice for the Second Invitation for the Bidding for
Industrial Product Export Quotas in 2009, Ministry of Commerce, Announcement (2009) No. 42, 8 June 2009
(Panel Exhibits CHN-310 and JE-91).

Bidding Announcement "), and Quotas of Bauxite of 2009
473 (" 2009 First Round Bauxite Bidding
Procedures"). Similarly, the Panel found that the expor t duties imposed in 2009 on the raw materials
at issue474 were imposed through the application of China's Customs Law of the People's Republic of
China475 (China's " Customs Law"), the Regulations of the People's Republic of China on Import and
Export Duties 476 (" Regulations on Import and Export Duties "), and the Notice Regarding the 2009
Tariff Implementation Program477 ("2009 Tariff Implementation Program").
241. In our discussion below, we refer, as did the Panel, to the groups of measures challenged by
the complainants as a whole, and in force at the time of the Panel's establishment, as the various
"series of measures". 478 More specifically, we use the term "series of measures" to describe,
collectively, the entire hierarchy of legal instru ments applicable to each product, that is, the
framework legislation, the regulations implementing th is legislation, and the specific legal instrument
or instruments identifying the individual export quotas or duties imposed on the product in 2009. We
therefore do not use that term to refer, for exampl e, to any specific legal instrument setting out an
export quota amount or an export duty rate taken in isolation.
242. While the framework legislation and implementing regulations remained in effect, certain of
the legal instruments setting out an export quota amount or an export duty rate identified by the
complainants in their panel requests expired or were replaced during the course of the Panel
proceedings.479 This was the case, for example, for the 2009 Tariff Implementation Program , which
specified export duty rates for seven of the nine raw materials at issue during calendar year 2009.
This measure expired at the end of 2009 and was replaced, with effect from 1 January 2010, by the
Circular of the State Council Tariff Commi ssion on the 2010 Tariff Implementation Plan 480 ("2010

473Quotas of Bauxite of 2009, Committee for the Invitation for bid for Export Commodity Quotas,
10 December 2008 (Panel Exhibit JE-94).
474See Panel Reports, paras. 7.76, 7.80, 7.84, 7.88, 7.92, 7.97, and 7.101.
475Customs 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 (Panel Exhibits
CHN-14 and JE-68).
476Regulations 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 (Panel Exhibits CHN-13 and JE-67).
477Notice Regarding the 2009 Tariff Implementation Program, State Council Tariff Policy Commission,
Shuiweihui (2008) No. 40, 1 January 2009 (Panel Exhibit JE-21).
478The term "series of measures" can be used in both the plural, as here, to refer to the various series of
measures upon which the Panel made findings and recommendatio ns in this case, or in the singular to apply to
the specific series (or group) of measures imposing an export duty or export quota on a single product in 2009.
479Panel Reports, para. 7.5.
480Circular of the State Council Tariff Commission on the 2010 Tariff Implementation Plan, Shui Wei
Hui [2009] No. 28, promul gated by the Customs Tariff Commission of the State Council on 8 December 2009
(Panel Exhibit CHN-5).

Tariff Implementation Plan "), which specified export duty rates for the raw materials at issue
applicable as of 1 January 2010.
481
243. The parties disagreed as to whether the Panel should consider the series of measures as it
existed in 2010, and including the specific measures setting out export duty rates or quota amounts for
each product in 2010, or the series of measures as it ex isted at the time of the Panel's establishment in
2009, including the 2009 export duty rates and quota amounts. 482 China recognized that the Panel
could make findings on 2009 measures specifying export quota and duty levels 483, but nevertheless
argued that it "would serve no purpose" for the Pane l to rule on measures that have ceased to exist
since they no longer violate WTO obligations or nullify or impair benefits.484
244. For their part, the complainants argued that the Panel should make findings on the "legal
situation prevailing on the date of the establishment of the Panel". 485 They asserted that the Panel
"should not consider the claims as addressing the 2010 measures" 486, and requested that the Panel not
"make any findings and recommendations on an y of the 2010 measures invoked by China". 487 The

481In 2009, bauxite and fluorspar had been subject to both export quotas and export duties. As from 1
January 2010, they were su bject to only one restraint each, that is , an export quota an d an export duty,
respectively. (See China's first written submission to the Panel, paras. 63-67; see also United States' other
appellant's submission, para. 64)
482The Panel appears to have used the terms "replacement measures" and "2010 measures"
interchangeably. We note, however, that the United States and Mexico explained to the Panel that:
[t]he reference in the [US][Mexic o] panel request to "replacement
measures" and "renewal measures" is a reference to legal instruments in
existence at the time of the [US][Mexico] panel request but of which the
[US][Mexico] may not have been aw are, that formally "replaced" or
"renewed" a legal instrument listed in the [US][Mexico] panel request but
did not change its content or effect. The Panel's terms of reference are
therefore not broad enough to include these legal instruments that took
effect on January 1, 2010 (the January 1, 2010 Measures).
(United States' second written submission to the Panel, pa ra. 338; Mexico's second written submission to the
Panel, para. 342)
In other words, the United States and Mexico used the term "replacement measures" to refer to
measures that were in existence at the time of the pane l requests. China, on the other hand, characterized the
legal instruments through which the export quotas and e xport duties were imposed as "replacement measures",
and argued that the ones that were in effect on the date of Panel establishment (effective during 2009) had
"expired" and had been "replaced" by "new" measures on 1 January 2010. China refers to the first category of
measures as "2009 measures" and the second as "2010 measures".
483Panel Reports, para. 7.6 (referring to China's first written submission to the Panel, para. 52).
484Panel Reports, para. 7.6 (referring to China's first written submission to the Panel, paras. 49-51, 56,
62, 64, and 67; China's second written submission to the Panel, section II, entitled "Panel Should Rule on the
2010 Measures To resolve the Disputes, and Should Not Rule on the 2009 Measure" and para. 12, where China
states that, "[i]n sum, the prompt and positive resolution of this dispute calls for the Panel to address the 2010
measures, and not the 2009 measures").
485Panel Reports, para. 7.7.
486Panel Reports, para. 7.7.
487Panel Reports, para. 7.22.

complainants considered, however, that "the me asures invoked in the context of China's defence
under GATT Article XX form part of China's evid ence and should be evaluated as evidence, but not
as measures per se."
488
245. The Panel observed that the complainants' pa nel requests refer to "any amendments or
extensions; related measures; replacement m easures; renewal measures; and implementing
measures".489 As it had done in the first phase of its preliminary ruling 490, the Panel decided that its
terms of reference were broad enough to encomp ass "amendments or replacement measures of the
2009 measures challenged by the complainants".491
246. However, after considering the parties' argumen ts, the Panel decided to adopt the following
approach, which we consider useful to set out in full:
(a) The Panel will make findings on the WTO consistency of
original measures included in its terms of reference. In light of the
request by the complainants that the Panel not make any findings on
any amendments or replacement measures, the Panel will only make
findings on 2009 measures and the Panel will not make findings on
2010 measures.
(b) In situations where a 2010 replacement measure appears to
correct the WTO inconsistency of the original 2009 measure—in
whole or in part (and therefore is considered not to have the same
essence, in whole or in part, as the expired measure)—the Panel will
decline to make findings or recommendations on the 2010 measure,
as it falls outside its terms of refere nce. However, in order to make a
determination on whether the new measure is of the same essence as
the expired measure, and hence imbues the expired measure with
ongoing effect or prospective appli cation, the Panel will necessarily
have to determine (without making a formal finding) whether the
WTO inconsistency is no longer present in the new measure.
(c) Nonetheless, with a view to ensuring that annually renewed
measures do not evade review by virtue of their annual nature—and
relying on the Appellate Body ruling in US – Continued Zeroing
where the Appellate Body recognized the possibility for a panel to
make a ruling on measures that have a "prospective application and a
life potentially stretching into the future"—the Panel will make
findings with respect to the series of measures comprised of the
relevant framework legislation, th e implementing regulation(s), other

488Panel Reports, para. 7.7.
489Panel Reports, para. 7.15.
490Panel's preliminary ruling (first phase), para. 20.
491Panel Reports, para. 7.20.

applicable laws and the specific measure imposing export duties or
export quotas in force at the date of the Panel's establishment.
(d) With respect to recommendations, generally the Panel will
not make recommendations on any original measure or on any
measure no longer in existence (or part thereof) on 15 December
2010, unless there is clear eviden ce that the measure has ongoing
effect.
(e) In situations where the claim is based on an annual measure,
as is the case with measures imposing export duties and with some of
the measures relating to export quotas, the Panel will make
recommendations with respect to the series of measures comprised of
the relevant framework legislati on, the implementing regulation(s),
other applicable laws and the specific measure imposing export
duties or export quotas in force at the date of the Panel's
establishment.
492
247. We understand the Panel to have set out to make findings on all of the series of measures in
effect in 2009, including specific measures setti ng out export duties and export quotas that had
expired during the course of the Panel proceedings. The Panel also clarified that it would not make
findings on the specific measures assigning export duty rates and quota levels for 2010 in the light of
the request of the complainants not to make findi ngs on such measures. The Panel further specified
that it would make findings and recommendations re lating to the export quotas and export duties on
the basis of "the series of measures comprised of the relevant framework legislation, the
implementing regulation(s), other applicable laws and the specific measure imposing export duties or
export quotas in force at the date of the Panel's establishment." 493 The Panel added that it would not
make recommendations on expired measures, unless there was clear evidence that such measures had
ongoing effect. The Panel expressed the view that , because the measures operating to impose export
duties and export quotas included measures of an annually recurring nature, its approach would ensure
that these measures did not "evade review".494
B. China's Appeal
1. Arguments on Appeal
248. On appeal, China does not dispute that the complainants had the "option" of pursuing claims
against the "future life" of the export duties and quotas at issue by challenging the measures

492Panel Reports, para. 7.33.
493Panel Reports, paras. 7.33(c) and 7.33(e).
494Panel Reports, para. 7.33(c).

specifying such duty rates and quota levels in 2010.
495 China adds that it even "encouraged" the
complainants to do so. 496 However, according to China, the co mplainants decided to exclude those
2010 measures from the dispute, thereby "breaki ng the chain of measures subject to dispute
settlement".497 In these circumstances, by making recommendations extending to measures specifying
export duty rates and quota amounts for 2010, China claims that the Panel acted inconsistently with its
terms of reference under Article 7.1 of the DSU; fa iled to make an objective assessment of the matter
under Article 11 of the DSU; and acted inconsistently with Article 19.1 of the DSU.
249. In response, the United States and Mexico submit that "China has not understood the Panel's
recommendations correctly". 498 In particular, they consider that the Panel did not make
recommendations on measures on which it had not ma de findings and did not make recommendations
on the basis of measures that were outside of its te rms of reference. Instead, the Panel made findings
and recommendations on the series of measures "i n force at the date of panel establishment". 499
According to the United States and Mexico, China's a ppeal therefore "may be dismissed on this basis
alone".500 The European Union makes arguments along the same lines, noting that the Panel did not
refer explicitly to "2010 'replacement measures'" in its recommendations.501 The European Union also
points out that the Panel did not refer to any such "replacement" measures in its Reports when it
identified the measures that composed the "series of measures".502
250. China's appeal regarding the Panel's recomme ndations rests on the proposition that the Panel
made recommendations on a "series of measures" that extends into the future and includes the 2010
measures. That is, China faults the Panel for "m aking recommendations regarding a so-called 'series
of measures' with a prospective life extended thr ough annual replacement measures" that were not
before the Panel when it made its recommendations. 503 In order to address China's arguments on
appeal, we begin by reviewing the nature of the challenge brought by the complainants before the
Panel.

497China's appellant's submission, para. 165. (emphasis omitted)
498Joint appellees' submission of the United States and Mexico, para. 81.
499Joint appellees' submission of the United States and Mexico, para. 83.
500Joint appellees' submission of the United States and Mexico, para. 83.
501European Union's appellee's submission, para. 39.
502European Union's appellee's submission, para. 39.

2. Analysis
251. A panel is required, under Article 7 of the DSU, to examine the "matter" referred to the DSB
by the complainant in the request for the establishment of a panel, and to make such findings as will
assist the DSB in making recommendations. The la nguage in a complainant's panel request is
therefore important because "a panel's terms of reference are governed by the request for
establishment of a panel".504 Article 19.1 of the DSU establishes a link between a panel's finding that
"a measure is inconsistent with a covered agre ement", and its recommendation that the respondent
"bring the measure into conformity". The "measures" that may be the subject of recommendations in
Article 19.1 are limited to those measures that are included within a panel's terms of reference.
252. In order to identify the object of the complainants' challenge, we begin with the language used
by the complainants in their panel requests. 505 With respect to export quot as, the complainants claim
in Section I of their panel requests that "China subjects the exportation of bauxite, coke, fluorspar,
silicon carbide, and zinc to quantitative restric tions such as quotas." The complainants further
contend that these restrictions "are reflected in" 25 legal instruments listed in the panel requests,
including China's Foreign Trade Law , Regulation on Import and Export Administration , Export
Quota Bidding Measures , 2008 Export Licence Administration Measures , 2008 Export Licensing
Working Rules, and Export Quota Bidding Implementation Rules , which constitute the general legal
framework and implementing regulations allowing for the imposition of export quotas, as well as the
specific measures that established the export q uota amounts and allocation procedures on bauxite,
coke, fluorspar, silicon carbide, and zinc for 2009. 506 Similarly, with respect to export duties, the
complainants identified in Section II of their pane l requests the object of their challenge as export
duties "reflected in" 19 specifically identified lega l instruments. These include measures setting out
the general legal framework for the imposition of export duties—that is, China's Customs Law and the
Regulations on Import and Export Duties —as well as the specific measure that sets out particular
export duty rates for 2009 on bauxite, coke, fluorsp ar, magnesium, manganese, silicon metal, yellow
phosphorous, and zinc—that is, the 2009 Tariff Implementation Program.
253. The complainants did not use th e words "series of measures" to describe the object of their
challenge. However, as noted above, they did identify the specific measures that, collectively,
compose China's legal system for the imposition of export duties and export quotas in their panel

504Appellate Body Report, US – Carbon Steel, para. 124.
505WT/DS394/7, WT/DS395/7, and WT/DS398/6. See Annexes I-III of these Reports.

requests.
507 Moreover, they contended that the im position of export duties and export quotas on
particular products, through the application of those measures, is contrary to China's WTO
obligations.
508 The complainants further clarified that th e Panel should not consider their claims as
addressing measures adopted after the establishment of the Panel, and requested that the Panel not
"make any findings and recommendations on any of the 2010 measures invoked by China".509
254. As the Panel explained, China's legislativ e system for the imposition of export duties
comprises basic framework legislation, an implem enting regulation, and specific "annual measures
that set the level of duty for specific products".510 The Panel added that, with respect to export quotas,
there is also a basic framework legislation, an implementing regulation, "a set of regulations
applicable to the relevant allocation system—dir ect allocation or quota bidding—and finally a set of
measures (of varying duration, from a few months to a year or indefinite) that determine the level of
quotas for specific products".511 The Panel did not consider that "individually each of those measures
would necessarily be WTO-inconsistent"; rather, the Panel said that, "when they operate in concert to
result in WTO-inconsistent [export duties or quotas], it is then that they would become prima facie
WTO-inconsistent".512 The Panel added that it is only by examining these "measures as they work in
concert that the Panel can reach a final determin ation on the complainants' export duty" and export
quota claims.513 In our view, the Panel correctly described the object of the complainants' challenge.
Indeed, the complainants' panel requests and subseque nt arguments before the Panel reveal that the
complainants brought their claims with respect to all the measures through which export duties and
quotas were imposed on particular raw materials at the time of the establishment of the Panel in 2009.
255. Based on the foregoing, we do not consider that the Panel erred in setting out to make
recommendations on the "series of measures" imposi ng export duties or export quotas in force at the
date of the Panel's establishment. 514 Moreover, in the light of the Panel's express statement that it
would make recommendations on measures "in force at the date of the Panel's establishment", and
that it would not make findings on the measures im posing specific export duty rates and quota levels

507See Panel Reports, paras. 7.17 and footnotes 55 and 56 thereto.
508Panel Reports, para. 3.2.
509Panel Reports, para. 7.22.
510Panel Reports, para. 7.17 and footnote 55 thereto. The Panel noted that the complainants' panel
requests identify measures comprising China's system for applying export duties. The Panel described this
system in further detail in its Reports at paras. 7.59-7.63.
511Panel Reports, para. 7.17 and footnote 56 thereto. The Panel noted that the complainants' panel
requests identify measures comprising China's system for applying export quotas. The Panel described this
system in further detail in Panel Reports, paras. 7.172-7.201.
512Panel Reports, paras. 7.68 and 7.224.
514Panel Reports, para. 7.33(e).

for 2010, we consider that the Panel made no expr ess recommendations regarding measures that were
excluded from the Panel's terms of reference by the complainants.
256. The question remains whether the recommendations that the Panel made regarding the series
of measures in force in 2009 have consequences fo r the measures imposing specific export duty rates
and quota levels for 2010, or indeed any existing or subsequent measures imposing export duties or
quotas on these products.
257. In China's view, because the complainants di d not seek findings and recommendations on the
specific 2010 measures that replaced the measures imposing export duty rates and quota amounts in
effect at the time of the Panel's establishment, no recommendation should ha ve consequences for any
2010 or other "replacement measures". The United States and Mexico respond that they were not
required to challenge and obtain findings and reco mmendations against "replacement measures" in
order for "future" measures to fall within the sco pe of China's implementation obligation if the
challenged measures were found to be WTO-inconsis tent. China's approach, they submit, "would
frustrate the aims of the dispute settlement system"
515 by creating a "moving target", whereby "both
Complainants and the Panel would continually have had to recast th eir arguments and assessment of
the legal state of play as it evolved through the proceedings".516
258. The United States and Mexico also fault China for confusing the distinction between "the
basis on which a recommendation is made" and "the application or effect of the recommendation once
it is made".517 They maintain that "the fact that a recommendation may have a temporal application in
the future (in the sense of requiring the Member c oncerned to ensure that it has complied with the
recommendation) does not contradict the fact that it is necessarily made on the basis of a finding
whose temporal application is in the past".518
259. In alleging that the Panel erred in maki ng recommendations extending to the measures
imposing specific export duty rates and quota amounts in 2010, China appears to assume that a
finding that is made with respect to a "series of measures" as it existed at the time the Panel was
established cannot have consequences for measures adopt ed in 2010 or thereafter, through the effect
of the recommendation made by the Panel or the A ppellate Body after adoption by the DSB. We
disagree.

515Joint appellees' submission of the United States and Mexico, para. 87.
516Joint appellees' submission of the United States and Mexico, para. 73 (referring to Appellate Body
Report, Chile – Price Band System, para. 144).
517Joint appellees' submission of the United States and Mexico, para. 85.
518Joint appellees' submission of the United States and Mexico, para. 85.

260. Pursuant to Article 19.1 of the DSU, when a pa nel concludes that a measure is inconsistent
with a covered agreement, it shall recommend that the Member concerned bring its measure into
conformity with that agreement. While a finding by a panel concerns a measure as it existed at the
time the panel was established, a recommendation is pros pective in nature in th e sense that it has an
effect on, or consequences for, a WTO Member's implementation obligations that arise after the
adoption of a panel and/or Appella te Body report by the DSB. As the Appellate Body noted in US –
Continued Zeroing , "it is not uncommon for remedies sought in WTO dispute settlement to have
prospective effect, such as a finding against laws or regulations, as such, or a subsidy programme with
regularly recurring payments".
519
261. At issue in this case are several groups, or series, of measures—that is, the relevant
framework legislation, the implementing regulations, and the specific measures in force at the date the
Panel was established imposing export duties or quotas on each raw material. As the Panel noted,
these groups of measures operate collectively to impose export duties or export quotas on the raw
materials at issue. The object of the complainan ts' challenge was the legal situation prevailing in
2009, that is, the "series of measures" pursuant to which China imposed export quotas and duties on
the raw materials at issue at the time the Panel was established. As the Panel found, such measures
include China's Customs Law and the Regulations on Import and Export Duties , which authorize the
imposition of export duties; China's Foreign Trade Law , which confers the authority to restrict or
prohibit the exportation of goods through export quot as and subjects those goods to an export quota
administration; as well as the re gulations implementing this framework legislation. In addition to
these standing measures, each serie s of measures also includes the specific measures imposing export
duty rates or quota amounts in force at a particular time. These latter measures are, as the Panel
found, of varying duration. In a particular year , China may, for example, increase or decrease the
amount of export duty imposed on a particular product , or it may even eliminate that duty altogether,
while the framework legislation and implementing regulations remain in place. 520 Against this
background, we do not consider that it was necessary for the complainants to include claims with
regard to the specific export duty and quota measures applied in 2010, in addition to those that were in
force when the Panel was established in 2009, in order to obtain a recommendation with prospective
effect.

519Appellate Body Report, US – Continued Zeroing, para. 171.
520The Panel found that such a change occurred, for example, with respect to the export duty rate
imposed on yellow phosphorous in 2009. (See Panel Reports, paras. 7.69-7.71)

262. In arguing that the complainants "decided" to exclude the "annual replacement measures"
from the dispute, thereby "breaking the chai n of measures subject to dispute settlement"
521, China
appears to assume that the complainants were in itially challenging annually reviewed export duties
and export quotas as separate and independent acts, or as a series of such acts, extending into the
future. China characterizes such measures as "a ch ain of annually renewed measures", and submits
that the complainants later "na rrowed the scope of the dispute to exclude the annual replacement
measures".522 Had the complainants' challenge been lodged against "ongoing conduct", as China
alleges, a recommendation would have served the purpose of directing China to discontinue its
WTO-inconsistent conduct. However, while the setting of export duty rates and export quotas for a
particular year is clearly a distinct action, the co mplainants' challenge in this case was not to specific
annual export duty or quota measures in isolation, or to ongoing conduct consisting of a "chain of
annually reviewed measures". Rather, the complain ants challenged China's framework legislation,
implementing regulations, and the specific measures in force at the date of the Panel's establishment
imposing export duties or export quotas on each raw material. As the Panel noted, when these
measures "operate in concert to result in WTO-inc onsistent [export duties or quotas], it is then that
they would become prima facie WTO-inconsistent".
523 This being the case, the Panel rightly
recommended that China bring its measures into conf ormity with its WTO obligations, such that the
"series of measures" does not operate to bring abou t a WTO-inconsistent result. The fact that the
Panel directed its findings and recommendations at the legal situation prevailing in 2009 does not
mean that China has no compliance obligations with respect to the Panel's findings.524
263. We note that, in making its recommendati ons, the Panel was concerned about making
recommendations on what it viewed to be "expired" measures. 525 The Panel noted, for example, that
previous panels had found that it would not be appropriate to make re commendations on measures

521China's appellant's submission, para. 165. (emphasis omitted)
523Panel Reports, paras. 7.68 and 7.224.
524As a separate matter, we note that the Panel ex pressed the view that "the WTO consistency of a
measure is necessarily relevant to its 'essence'" in th e context of WTO dispute settlement procedures. (Panel
Reports, para. 7.17) The Panel added that, "[i]f a new measure appears to be WTO consistent, while the original
was not, the new measure takes on a different character in the context of WTO dispute settlement and cannot be
said to be of the 'same essence'." ( Ibid.) We fail to see why the "apparent" consistency, or inconsistency, of a
measure would necessarily have a bearing on the issue of whether it would be deemed to be of the "same
essence" as the original measure. Fo r example, the fact that one measure im poses a lesser export duty rate than
another measure might mean that the former is consistent while the latter is inconsistent with a WTO Member's
obligations under Article II of the GATT 1994. It is not clear, however, why this fact, taken alone, would
necessarily mean that the two measures are not of the "same essence".

that no longer exist.
526 The DSU does not specifically address whether a WTO panel may or may not
make findings and recommendations with respect to a measure that expires or is repealed during the
course of the panel proceedings. Panels have ma de findings on expired measures in some cases and
declined to do so in others, depending on the particularities of the disputes before them. 527 In the
present dispute, China takes issue with the recomm endations made by the Panel, and not with its
findings on particular measures. In US – Upland Cotton , the Appellate Body drew a distinction
between the question of whether a panel can make findings with respect to an expired measure and the
question of whether an expired measure is susceptib le to a recommendation under Article 19.1 of the
DSU:
The Appellate Body in US – Certain EC Products confirmed that the
3 March Measure had ceased to exist. It noted that there was an
obvious inconsistency between the finding of the panel that "the
3 March Measure is no longer in existence" and the panel's
subsequent recommendation that the Dispute Settlement Body (the
"DSB") request the United States to bring the 3 March Measure into
conformity with its WTO obligations . Thus, the fact that a measure
has expired may affect what recommendation a panel may make. It
is not, however, dispositive of the preliminary question of whether a
panel can address claims in respect of that measure.
528 (footnote
omitted)
264. Contrary to the Panel's approach in this disput e, the Appellate Body indicated that the fact
that a measure has expired "may affect" what recommendation a panel may make. The Appellate
Body did not suggest that a panel was preclude d from making a recommendation on such a measure
in a particular case. In general, in cases where the measure at issue consists of a law or regulation that
has been repealed during the panel proceedings, it would seem there would be no need for a panel to
make a recommendation in order to resolve the dispute. The same considerations do not apply, in our
view, when a challenge is brought against a group or "series of measures" comprised of basic
framework legislation and implementing regulations , which have not expired, and specific measures
imposing export duty rates or export quota amounts fo r particular products on an annual or time-
bound basis, as is the case here. The absence of a recommendation in such a case would effectively
mean that a finding of incons istency involving such measures w ould not result in implementation

526Panel Reports, para. 7.28 (referring to Panel Reports, EC – Trademarks and Geographic Indications,
527See, for instance, Panel Report, US – Wool Shirts and Blouses , para. 6.2; Panel Report, Indonesia –
Autos, para. 14.9; Panel Report, Chile – Price Band System , para. 7.126; Panel Report, Dominican Republic –
Imports and Sale of Cigarettes , para. 7.344; and Panel Report, EC – Approval and Marketing of Biotech
Products, paras. 7.1303-7.1312.
528Appellate Body Report, US – Upland Cotton, para. 271.

obligations for a responding member, and in that sense would merely be declaratory.
529 This cannot
be the case.
265. Article 3.7 of the DSU provides that "[t]he ai m of the dispute settlement mechanism is to
secure a positive solution to a dispute." This is affi rmed in Article 3.4 of the DSU, which stipulates
that "[r]ecommendations or rulings made by the DSB shall be aimed at achieving a satisfactory
settlement of the matter in accord ance with the rights and obliga tions under this Understanding and
under the covered agreements." In our view, in order to "secure a positive solution to the dispute" and
to make "sufficiently precise recommendations a nd rulings so as to allow for prompt compliance"
530,
it was appropriate for the Panel in this case to have recommended that the DSB request China "to
bring its measures into conformity with its WTO ob ligations such that the 'series of measures' does
not operate to bring about a WTO-inconsistent result".531
3. Conclusion
266. We do not consider that the Panel erred in recommending that the DSB request China "to
bring its measures into conformity with its WTO ob ligations such that the 'series of measures' does
not operate to bring about a WTO-inconsistent result".532 Nor do we consider the Panel to have made
a recommendation on a matter that was not before it. Accordingly, we do not agree with China that
the Panel acted inconsistently with its obligations under Article 7.1 of the DSU. China's claims under
Article 11 and Article 19.1 of the DSU are conseque ntial in nature and depend on whether we find
that the Panel correctly understood the object of th e complainants' challenge, that is, the "matter" on
which the Panel was required to make its findings. In the light of our view that the Panel did not
make findings on a matter that was not before it, we dismiss these claims by China. In sum, therefore,
we find that the Panel did not err in recommending, in paragraphs 8.8, 8.15, and 8.22 of the Panel
Reports, that China bring its export duty and export quota measures into conformity with its WTO

529In fact, China argued at the oral hearing that, because the complainants brought an "as applied" claim
regarding the application of measures in 2009, and because they expressly excl uded "replacement measures"
from the Panel's terms of reference, all the export duty a nd quota measures within the Panel's terms of reference
have since expired. In China's view, a recommendation cannot be made with respect to an expired measure, nor
with respect to a measure that is outside the Panel's terms of reference.
531Panel Reports, paras. 8.8, 8.15, and 8.22.
532Panel Reports, paras. 8.8, 8.15, and 8.22. The Panel made the same recommendation with respect to
each of the complainants.

obligations such that the "series of measures" do not operate to bring a bout a WTO-inconsistent
result.
533
C. Conditional Other Appeals of the United States, Mexico, and the European Union
267. In their other appeals, the United States a nd Mexico refer to the possibility that the
Appellate Body might reverse the Panel's recommenda tions in paragraphs 8.8, 8.15, and 8.22 of the
Panel Reports "to the extent that they appl y to replacement measures", and find that no
recommendation should have been made on the "seri es of measures" as they existed on the date of
Panel establishment.534 In the event that the Appellate Body were to so find, the United States and
Mexico would seek review of the Panel's interp retation and conclusion that it could not make
recommendations on the 2009 export quota and expo rt duty measures that were annually recurring
and in effect as of the date of Panel establishment.
268. The European Union also submits a conditional ap peal in the event the Appellate Body were
to accept the relevant ground of appeal raised by Ch ina, and also reject the relevant other appeals
submitted by the United States and Mexico. In that case, the European Union would argue that the
Panel erred in finding that, during the course of the Panel proceedings, the European Union
"requested the Panel not to make any findings and recommendations on the legal instruments taking
effect on 1 January 2010" and thereby narrowed the Panel's terms of reference.535
269. As the condition on which the United States and Me xico's request is premised has not been
met, there is no need for us to address the United States' and Mexico's conditional appeal. For the
same reason, we do not address the European Union's conditional appeal.
VI. Applicability of Article XX
270. In this section, we address Ch ina's claim that Article XX of the GATT 1994 is available as a
defence to China in relation to export duties found to be inconsistent with China's obligations under
Paragraph 11.3 of China's Accession Protocol.

533Panel Reports, paras. 8.8, 8.15, and 8.22. The Panel made the same recommendation with respect to
each of the complainants.
534United States' other appellant's submission, para. 8; Mexico's other appellant's submission, para. 16.
535European Union's other appellant's submission, para. 3 (referring to Panel Reports, paras. 7.21
and 7.22).

A. The Panel's Findings
271. The Panel began its interpreta tion of Paragraph 11.3 of Ch ina's Accession Protocol by
observing that Paragraph 11.3 "does not include any express reference to Article XX of the
GATT 1994, or to provisions of the GATT 1994 more generally".
536 In so doing, the Panel drew a
contrast between the text of Paragraph 11.3 and th e language contained in Paragraph 5.1 of China's
Accession Protocol—"without prejudice to China's right to regulate trade in a manner consistent with
the WTO Agreement"—which the Appellate Body examined in China – Publications and Audiovisual
Products.537 In particular, the Panel noted that Para graph 11.3 contains only a "specific set of
exceptions: those covered by Annex 6 a nd those covered by GATT Article VIII". 538 For the Panel,
the language in Paragraph 11.3, together with the "omission of general references to the
WTO Agreement or to the GATT 1994" 539, suggest that WTO Members did not intend to incorporate
the defences available under Ar ticle XX into Paragraph 11.3. 540 The Panel also found no support in
the provisions of China's Accession Working Party Report for the proposition that China could invoke
Article XX of the GATT 1994 to justify violations of Paragraph 11.3 of China's Accession Protocol.
272. Regarding the context provided by the provisi ons of the other WTO agreements, the Panel
noted that there are no general exceptions in the WTO Agreement , and that each of the covered
agreements provides its own "set of exceptions or flexibilities" applicable to the specific commitments
in each agreement. 541 Referring to Article XX of the GA TT 1994, the Panel considered that the
reference to "this Agreement" a priori suggests that the exceptions therein relate only to the
GATT 1994.542 Noting that, in several instances, provisi ons of Article XX have been incorporated
into other WTO agreements by cross-reference, the Panel observed that, since no such language is
found in Paragraph 11.3 of China's Accession Protocol, Article XX coul d not be intended to apply to
Paragraph 11.3. Furthermore, whereas the Panel ag reed that WTO Members have an "inherent right"

536Panel Reports, para. 7.124.
537Paragraph 5.1 of China's Accession Protocol provides:
Without prejudice to China's right to regulate trade in a manner consistent
with the WTO Agreement, China shall progressively liberalize the
availability and scope of the right to tr ade, so that, within three years after
accession, all enterprises in China shall have the ri ght to trade in all goods
throughout the customs territory of China, except for those goods listed in
Annex 2A which continue to be subject to state trading in accordance with
this Protocol.
538Panel Reports, para. 7.126.
539Panel Reports, para. 7.129.
540Panel Reports, paras. 7.126-7.129.
541Panel Reports, para. 7.150.
542Panel Reports, para. 7.153.

to regulate trade, the Panel considered that China had exercised this right in negotiating and ratifying
the WTO Agreement, including the terms of its accession to the WTO.
543 On this basis, the Panel
concluded that the defences of Ar ticle XX of the GATT 1994 are not ava ilable to justify violations of
the obligations contained in Paragraph 11.3 of China's Accession Protocol.544
B. Arguments on Appeal
273. China alleges various errors in the Panel's analysis and requests the Appellate Body to reverse
the Panel's finding that China may not seek to justify export duties pursuant to Article XX of the
GATT 1994 that were found to be inconsistent with its commitment to eliminate export duties under
Paragraph 11.3 of its Accession Protocol.
545 China further requests us to find that Article XX is
available to China to justify such measures.
274. China contends, in particular, that the Panel e rred in determining that there is "no textual
basis" in China's Accession Protocol for it to invoke Article XX in defence of a claim under
Paragraph 11.3. 546 In China's view, the Panel's finding that Paragraph 11.3 excludes recourse to
Article XX of the GATT 1994 was based on the Pa nel's erroneous assumption that the absence of
language expressly granting the right to regulate trad e in a manner consistent with Article XX means
that China and other Members intended to deprive Ch ina of that right. Moreover, China argues that
WTO Members have an "inherent right" to regulate trade, "including using export duties to promote
non-trade interests".547
275. Although China takes issue with the Panel's finding that Article XX is not available to China
to justify measures that would otherwise be incons istent with its commitment to eliminate export
duties under Paragraph 11.3 of its Accession Protocol, it does not request the Appellate Body to
reverse the Panel's finding that China failed to de monstrate that the export duties at issue in this
dispute are justified under Article XX of the GATT 1994.
276. The United States, the European Union, and Mexico support the Panel's finding that
Article XX of the GATT 1994 cannot be invoked to ju stify export duties that are inconsistent with
Paragraph 11.3 of China's Accession Protocol. The United States and Mexico recall that, in China –

543Panel Reports, para. 7.156.
544Panel Reports, para. 7.158.
545China's appellant's submission, para. 168 (referring to Panel Reports, paras. 7.158, 7.159, 8.2(b)-(c),
8.9(b)-(c), and 8.16(b)-(c)).

Publications and Audiovisual Products, the Appellate Body interpreted the language of Paragraph 5.1
of China's Accession Protocol as including a referen ce to Article XX. They note, however, that the
language of Paragraph 11.3 is "in sharp contrast" to that of Paragraph 5.1, as it is "specific and
circumscribed", "sets forth particular commitme nts", and two exceptions to those commitments.
According to the European Union, while WTO Members can "incorporate" Article XX of the
GATT 1994 into another WTO agreement if they so "wish", the legal basis for "applying" that
provision to another agreement would be the "very text of the incorporation", and not Article XX
itself, as Article XX is limited by its "express terms" to the GATT 1994.
548 The European Union also
asserts that the Panel was correct in finding that Ch ina had exercised its inherent and sovereign right
to regulate trade by negotiating the terms of its accessi on to the WTO such that this inherent right to
regulate trade, without more, does not permit recourse to Article XX.
277. Canada, Colombia, Japan, Korea, and Turkey generally agree with the complainants that
Article XX of the GATT 1994 cannot be invoked in orde r to justify a violation of China's export duty
commitments contained in Paragraph 11.3 of China's Accession Protocol.549
C. Availability of Article XX to Justify Export Duties that Are Found to Be Inconsistent
with Paragraph 11.3 of China's Accession Protocol
278. Paragraph 1.2 of China's Accession Protocol provi des that the Protocol "shall be an integral
part" of the WTO Agreement. As such, the customary rules of interpretation of public international
law, as codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties 550 (the
"Vienna Convention"), are, pursuant to Article 3.2 of the DSU, applicable in this dispute in clarifying
the meaning of Paragraph 11.3 of the Protocol. 551 Article 31(1) of the Vienna Convention provides
that a "treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to
the terms of the treaty in their context and in the light of its object and purpose." Therefore, we will
begin our analysis with the text of Paragraph 11.3.

548European Union's appellee's submission, para. 54.
549See Canada's third participant's submission, paras. 14-24; Colombia's third participant's submission,
paras. 11 and 12; and Japan's third participant's submission, paras. 26-30, 34-37, and 39-42. For its part, Korea
considers that the "gravity" and importance of an Artic le XX defence suggests that "[m]ore explicit wording"
should have been used to express the "relinquishment" of such an "important right". Nonetheless, in Korea's
view, the difference in "tone and nuance" between Paragraph 11.3 and Paragraphs 11.1 and 11.2 of China's
Accession Protocol, as well as the context of the othe r provisions of Section 11, support the Panel's ultimate
conclusion in the present disputes and should be upheld by the Appellate Body. (Korea's third participant's
submission, paras. 32 and 33)
550Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679.
551See Appellate Body Report, US – Gasoline , p. 17, DSR 1996:I, 3, at 16; and Appellate Body
Report, Japan – Alcoholic Beverages II, p. 10, DSR 1996:I, 97, at 104.

1. Paragraph 11.3 of China's Accession Protocol
279. Paragraph 11.3 of China's Accession Protocol provides that:
China shall eliminate all taxes and charges applied to exports unless
specifically provided for in Annex 6 of this Protocol or applied in
conformity with the provisions of Article VIII of the GATT 1994.
280. By its terms, Paragraph 11.3 of China's Accessi on Protocol requires China to "eliminate all
taxes and charges applied to exports" unless one of the following conditions is satisfied: (i) such
taxes and charges are "specifically provided for in Annex 6 of [China's Accession] Protocol"; or
(ii) such taxes and charges are "applied in confor mity with the provisions of Article VIII of the
GATT 1994".
281. As noted, Paragraph 11.3 of China's Accession Pr otocol refers explicitl y to "Annex 6 of this
Protocol". Annex 6 of China's Accession Protocol is entitled "Products Subject to Export Duty". It
sets out a table listing 84 different products (each identified by an eight-digit Harmonized System
("HS") number and product description), and a maximum export duty rate for each product.
552
Following the table, Annex 6 includes the following text (the "Note to Annex 6"):
China confirmed that the tariff le vels in this Annex are maximum
levels which will not be exceeded. China confirmed furthermore that
it would not increase the presently applied rates, except under
exceptional circumstances. If such circumstances occurred, China
would consult with affected me mbers prior to increasing applied
tariffs with a view to finding a mutually acceptable solution.
282. Except for yellow phosphorus, none of the raw materi als at issue in this dispute is listed in
Annex 6 of China's Accession Protocol.
553 China argues that the u se of the term "exceptional
circumstances" in the Note to Annex 6 indicates "a substantive overlap between the scope of the
exceptions set forth, respectively, in Annex 6 and Article XX of the GATT 1994". 554 In China's view,
"by allowing China to adopt otherwise WTO-inconsistent export duties in 'exceptional circumstances',
China and other WTO Members have demonstrated a shared intent that Chin a is permitted to have
recourse—whether directly or indirectly—to the 'ex ceptional circumstances' set forth in Article XX to

552Panel Reports, para. 7.66.
553The Panel found that, on 21 Decem ber 2009, yellow phosphorous was subject to an export duty of
20 per cent, which did not exceed the maximum rate list ed in Annex 6 of China's Accession Protocol. The
Panel found, therefore, that the provision of the 2009 Tariff Implementation Program applicable to yellow
phosphorus that was in force at the time of the Pane l's establishment was not inconsistent with China's WTO
obligations. (See Panel Reports, para. 7.71) This finding by the Panel has not been challenged on appeal.

justify such duties."
555 China suggests that such "exceptiona l circumstances" can be invoked both to
exceed the maximum rates specified in Annex 6 for the 84 products listed in the Annex, and to impose
export duties on non-listed products.
283. In response, the United States and Mexico assert that the first sentence of the Note "makes
clear" that China committed not to impose export duties on the 84 products listed in Annex 6 above
the maximum rates set out therein. 556 In their view, the second and third sentences of the Note also
impose a further obligation upon China that, in th e event that the applied rate for any of the
84 products listed in Annex 6 is less than the maxi mum rate, China can raise the applied rate only in
"exceptional circumstances", and only after consulting w ith the affected Members. In the light of this
additional obligation, the United States and Mexico consider that the Note to Annex 6 does not
provide "any basis" for China to impose export duties on the 84 listed products above the maximum
rates specified in Annex 6, or "to impose any export duties at all with respect to the products not listed
in Annex 6".557
284. Paragraph 11.3 requires China to eliminate ta xes and charges applied to exports unless such
taxes and charges are "specifically provided for in Annex 6" of China's Accession Protocol. Annex 6
in turn "specifically provides for" maximum expor t duty levels on 84 listed products. The Note to
Annex 6 clarifies that the maximum rates set out in Annex 6 "will not be exceeded" and that China
will "not increase the presently applied rates, exce pt under exceptional circumstances". The Note
therefore indicates that China may increase the "presently applied rates" on the 84 products listed in
Annex 6 to levels that remain w ithin the maximum levels listed in the Annex. We find it difficult to
see how this language could be read as indicating th at China can have recourse to the provisions of
Article XX of the GATT 1994 in order to justif y imposition of export duties on products that are not
listed in Annex 6 or the imposition of export du ties on listed products in excess of the maximum
levels set forth in Annex 6.
285. We further note that the third sentence of the Note to Annex 6 refers to the "exceptional
circumstances" described in the second sentence of that provision, stating that, "[i]f such
circumstances occurred, China would consult with affected members prior to increasing applied tariffs
with a view to finding a mutually acceptable solutio n." This language further supports our view that
the "exceptional circumstances" referred to in the No te to Annex 6 are ones that, if shown to exist,

556Joint appellees' submission of the United States and Mexico, para. 113.
557Joint appellees' submission of the United States and Mexico, para. 113; see also Canada's third
participant's submission, paras. 14 and 15.

would allow China to increase applied tariffs up to the maximum tariff levels set out in Annex 6 for
the products listed. We therefore see nothing in the Note to Annex 6 suggesting that China could
invoke Article XX of the GATT 1994 to justify th e imposition of export duties that China had
committed to eliminate under Paragraph 11.3 of China's Accession Protocol.
558
286. China recalls that, before the Panel, the Eur opean Union claimed that China violated its
obligations under Annex 6 by failing to consult wi th affected Members prior to the imposition of
export duties on particular forms of bauxite, coke , fluorspar, magnesium, manganese, silicon metal,
and zinc, none of which are among th e 84 products listed in Annex 6. 559 Noting the Panel's finding
that China has acted inconsistently with its obligations under Annex 6 because it failed to consult with
other affected WTO Members prior to imposing export duties on the raw materials at issue 560, China
argues that, because none of the products subject to the European Union's claim is included in the
Annex 6 schedule, the European Union's claim and the Panel's finding necessarily mean that "the
exception in Annex 6 permits China to impose expor t duties on all products, provided that there are
'exceptional circumstances', and that China consults with the affected Members."561
287. In our view, the use of the word "furthermore " in the second sentence of the Note to Annex 6
suggests that the obligations contained in the second and third sentences of the Note, including the
consultation obligation, are "in addition" to China' s obligation under the first sentence not to exceed
the maximum tariff levels provided for in Annex 6. We see nothing in the Note to Annex 6 that
would allow China to: (i) impose export duties on produc ts not listed in Annex 6; or (ii) increase the
applied export duties on the 84 products listed in Annex 6, in a situation where "exceptional
circumstances" have not "occurred". We therefore di sagree with the Panel to th e extent it found that
China's failure to consult with other WTO affect ed Members prior to the imposition of export duties
on raw materials not listed in Annex 6 is inc onsistent with its oblig ations under Annex 6. 562 T h e
imposition of these export duties is inconsistent w ith Paragraph 11.3 of China's Accession Protocol,
and because the raw materials at issue are not lis ted in Annex 6, the consultation requirements
contained in the Note to Annex 6 are not applicable.

558Furthermore, as the European Union notes, the Note to Annex 6 resembles to some extent the
situation envisaged in Article XXVI II of the GATT 1994 and Article XX I of the GATS (Modification of
Schedules), which deal with changes in tariff bindings and changes in the Services Schedules of Specific
Commitments. However in these situations, WTO Members are required to "compensate" by offering increased
market access in other areas on different tariff lines or service sectors. (European Union's appellee's submission,
para. 68)
562See Panel Reports, para. 7.104. We note that this finding by the Panel has not been appealed.

288. We turn next to examine the relevance of th e reference to Article VIII of the GATT 1994 in
Paragraph 11.3 of China's Accession Protocol. Article VIII provides, in relevant part, as follows:
All fees and charges of whatever character (other than import and
export duties and other than taxes w ithin the purview of Article III)
imposed by contracting parties on or in connection with importation
or exportation shall be limited in am ount to the approximate cost of
services rendered and shall not represent an indirect protection to
domestic products or a taxation of imports or exports for fiscal
purposes.
289. China asserts that the re ference to Article VIII in Paragraph 11.3 confirms the availability of
Article XX of the GATT 1994. China reasons that Paragraph 11.3 of its Accession Protocol
"requires" that export taxes and ch arges be "applied in conformity w ith the provisions of Article VIII
of the GATT 1994".
563 According to China, "[i]f they are not, the measure violates both
Paragraph 11.3 and Article VIII." 564 China argues that, "[i]n the event that a measure violates
Article VIII of the GATT 1994, it may, of co urse, be justified under Article XX of the
GATT 1994".565 It follows that "China is not deprived of its right to justify a measure that violates
Article VIII through recourse to Article XX simply because a complainant chooses to bring a claim
under Paragraph 11.3" of China's Accession Protocol. 566 In China's view, the fact that Article VIII
applies to certain export charges and fees covered by Paragraph 11.3, and not to export duties, does
not render the reference to Article VIII "irrelevant", as the referen ce shows that the obligations under
Paragraph 11.3 are "not absolute and unqualified", an d that China did not agree to abandon its right to
resort to Article XX.567
290. Although Article VIII covers "[a]ll fees and charges of whatever character imposed by [WTO
Members] on or in connection with importation or exportation", it expressly excludes export duties,
which are at issue here. In our view, as export duties are outside the scope of Article VIII, the
question of conformity or consistency with this Ar ticle does not arise. Consequently, the fact that
Article XX may be invoked to justify those fees and charges regulated unde r Article VIII does not
mean that it can also be invoked to justify export duties, which are not regulated under Article VIII.

291. As noted by the Panel, "the language in Para graph 11.3 expressly refers to Article VIII, but
leaves out reference to other provisions of the GATT 1994, such as Article XX."
568 Moreover, there
is no language in Paragraph 11.3 similar to that found in Paragraph 5.1 of China's Accession
Protocol—"[w]ithout prejudice to China's right to re gulate trade in a manner consistent with the WTO
Agreement"—which was interprete d by the Appellate Body in China – Publications and Audiovisual
Products. In our view, this suggests that China may not have recourse to Article XX to justify a
breach of its commitment to eliminate export duties under Paragraph 11.3 of China's Accession
Protocol.
292. Having examined the text of Paragraph 11.3, we turn to examine the context of that provision.
2. Paragraphs 11.1 and 11.2 of China's Accession Protocol
293. Paragraph 11.1 of China's Accession Protocol pr ovides that "China shall ensure that customs
fees or charges applied or administered by national or sub-national authorities, shall be in conformity
with the GATT 1994". Paragraph 11.2 further stipulates that "China shall ensure that internal taxes
and charges, including value-added taxes, applie d or administered by national or sub-national
authorities shall be in conformity with the GA TT 1994." Both of these provisions contain the
obligation to ensure that certain fees, taxes or ch arges are "in conformity with the GATT 1994". This
is not the case for Paragraph 11.3. We also note that Paragraph 11.1 refers to "customs fees and or
charges" in general and Paragra ph 11.2 refers in turn to "int ernal taxes and charges", while
Paragraph 11.3 refers specifically to the elimination of "taxes and ch arges applied to exports". Given
the references to the GATT 1994 in Paragraphs 11.1 and 11.2, and the differences in the subject
matter and nature of the obligatio ns covered by these provisions, we consider that the absence of a
reference to the GATT 1994 in Paragraph 11.3 furthe r supports our interpretation that China may not
have recourse to Article XX to justify a breach of its commitment to eliminate export duties under
Paragraph 11.3. Moreover, as China's obligation to eliminate export duties arises exclusively from
China's Accession Protocol, and not from the GATT 1994, we consider it reasonable to assume that,
had there been a common intention to provide access to Article XX of the GATT 1994 in this respect,
language to that effect would have been included in Paragraph 11.3 or elsewhere in China's Accession
Protocol.

568Panel Reports, para. 7.129.

3. China's Arguments concerning Paragraph 170
294. China relies on the wording of Paragraph 170 of China's Accession Working Party Report to
support its position that China assumed a "qualified" obligation to eliminate export duties, and is
entitled to have recourse to the provisions of Ar ticle XX of the GATT 1994 to justify export duties
that would otherwise be inconsistent with Paragraph 11.3 of China's Accession Protocol.
295. Paragraph 170 of China's Accession Working Part y Report is referenced in Paragraph 342 of
China's Accession Working Party Report and is theref ore, by virtue of Paragraph 1.2 of China's
Accession Protocol, incorporated into the Protocol. Paragraph 170 falls under subsection D of China's
Accession Working Party Report, which is entitled "Internal Policies Affecting Foreign Trade in
Goods"; subsection D(1) is entitled "Taxes and Charges Levied on Imports and Exports".
Paragraph 170 provides in relevant part:
The representative of China confir med that upon accession, China
would ensure that its laws and regulations relating to all fees, charges
or taxes levied on imports and expor ts would be in full conformity
with its WTO obligations, including Articles I, III:2 and 4, and XI:1
of the GATT 1994[.]
296. China points to the identical language in the title of the subsection under which Paragraph 170
falls, and that of Section 11 of China's Accessi on Protocol. Both are entitled "Taxes and Charges
Levied on Imports and Exports". China argues that this demonstrates a "very considerable overlap" in
the scope of measures to which Paragraph 11.3 and Paragraph 170 apply, and that they impose
"cumulative obligations" with respect to " taxes" and " charges on exports".569 China argues, in
essence, that Paragraph 170 of China's Accessi on Working Party Report and Paragraph 11.3 of
China's Accession Protocol both apply to export duti es, and that "any flexibilities that Paragraph 170
affords to China to adopt otherwise WTO-inconsistent export 'taxes' and 'charges' must extend equally
to Paragraph 11.3".570
297. The United States and Mexico consider Ch ina's arguments to be "without merit". 571 T h e y
submit that Paragraph 169 of China's Accession Working Party Report shows that some Members
were concerned about China's internal policies, especially those of sub-national governments
imposing discriminatory taxes and other charges that would affect trade in goods, and that China
responded to this concern in Paragr aph 170 by confirming that its laws relating to all fees, charges, or

569China's appellant's submission, para. 233. (original emphasis)
571Joint appellees' submission of the United States and Mexico, para. 128.

taxes levied on imports and exports would be in full conformity with its WTO obligations. The
United States and Mexico argue that it is "untenable to believe"
572 that Paragraph 170 reflects the
negotiators' intent to apply Article XX of th e GATT 1994 to Paragraph 11.3 of China's Accession
Protocol, which sets forth a "new commitment w ith respect to export duties and the exceptions
applicable to that commitment". 573 They further point out that it is Paragraph 155 of China's
Accession Working Party Report that reflects concerns with respect to export duties, and which refers
to the same specific exceptions as Paragraph 11.3 of China's Accession Protocol.574
298. We note that China's Accession Working Party Report sets out many of the concerns raised
and obligations undertaken by China during its acce ssion process. The various paragraphs contained
in China's Accession Working Party Report are organi zed according to subject matter, such that the
section on "Policies Affecting Trade in Goods" is divided into subsections dealing with "Trading
Rights", "Import Regulation", "Export Regulations", and "Internal Policies Affecting Trade in
Goods". Paragraph 170 of China's Accession Work ing Party Report falls under subsection D, entitled
"Internal Policies Affecting Foreign Trade in Goods". This subsection contai ns only two paragraphs.
Paragraph 169 indicates that some members of Ch ina's Accession Working Party "expressed concern
about the application of the [value-added tax ("VAT ")] and additional charges levied by sub-national
governments on imports" and considered "[n]on-di scriminatory application of the VAT and other
internal taxes"575 to be "essential". The language in the title to subsection D and in Paragraph 169
suggests to us that Paragraph 170 is concerned with "internal policies" affecting "all fees, charges or
taxes levied on imports and exports" and sets out China's commitment in r esponse to the concern
expressed by WTO Members at the time of China's accession regarding "the application of VAT and
additional charges levied by sub-national governments on imports".
299. As we see it, Paragraph 170 of China's Acc ession Working Party Report is of limited
relevance in interpreting Paragraph 11.3 of China's Accession Protocol. In particular, Paragraph 170
does not shed much light on China's commitment to eliminate export duties. Instead, it is
Paragraphs 155 and 156 of China's Accession Working Party Report 576, found in the section entitled
"Export Regulations", that deal with China's commitm ents with respect to the elimination of export

572Joint appellees' submission of the United States and Mexico, para. 130.
573Joint appellees' submission of the United States and Mexico, para. 132.
574Joint appellees' submission of the United States and Mexico, para. 134 (referring to Panel Reports,
para. 7.145).
575Emphasis added.
576Paragraphs 155 and 156 are not referenced in Paragraph 342 of China's Accession Working Party
Report. Nonetheless, we agree with th e Panel that they are of interpretative relevance in that they articulate the
concerns of WTO Members at the time with respect to China's use of export duties.

duties. The language of Paragraph 155 is very si milar to that found in Paragraph 11.3 of China's
Accession Protocol, and provides that taxes and char ges applied exclusively to exports "should be
eliminated unless applied in conformity with GATT Article VIII or listed in Annex 6 to the Draft
Protocol". Paragraph 156, in turn, provides: "China noted that the majority of products were free of
export duty, although 84 items … were subject to expor t duties". As in the case of Paragraph 11.3,
Paragraphs 155 and 156 make no reference to the availability of an Article XX defence for the
commitments contained therein. This further s upports our interpretation that China does not have
recourse to Article XX of the GATT 1994 to justif y export duties found to be inconsistent with
China's obligations under Paragraph 11.3 of China's Accession Protocol.
4. China's Right to Regulate Trade
300. China argues that, "like any other state", it enjoys the right to regulate trade in a manner that
promotes conservation and public health. 577 Referring to the Appellate Body report in China –
Publications and Audiovisual Products , China points out that such a right to regulate trade is an
"inherent right", and "not a 'right bestowed by international treaties such as the WTO Agreement'".578
According to China, by acceding to the WTO, Me mbers agree to exercise their inherent right in
conformity with disciplines set out in the covered agreements, either by complying with affirmative
obligations, or by complying with "the obligations attaching to an exception, such as those included in
Article XX" of the GATT 1994. 579 China further emphasizes that China's Accession Protocol and
Accession Working Party Report contain no language showing that China "abandon[ed]" its inherent
right to regulate trade. Instead, China submits that its accession commitments "indicate" that it retains
this right.580 In China's view, the Panel's inte rpretation of Paragraph 11.3 "turns inherent rights into
acquired rights" 581 and "distorts the balance of rights and obligations" established when China
acceded to the WTO".582
301. The United States and Mexico begin by highlighting that, contrary to China's claims, the
Panel "nowhere suggested" that WTO Members abandone d their right to regulate trade in entering the
WTO.583 They assert that the Appellate Body report in China – Publications and Audiovisual

578China's appellant's submission, para. 275 (quoting Appellate Body Report, China – Publications and
Audiovisual Products, para. 222).
581China's appellant's submission, para. 291. (original emphasis)
582China's appellant's submission, para. 274, subheading IV.C.5.d.
583Joint appellees' submission of the United States and Mexico, para. 140.

Products recognized that, because WTO Members have an inherent right to regulate trade, it was
necessary in the context of the WTO agreements to agree on rules that constrain that right.
584 The
United States and Mexico also rely upon the Appellate Body report in Japan – Alcoholic Beverages II
to argue that China's obligation to eliminate e xport duties contained in Paragraph 11.3 of China's
Accession Protocol is a "commitment" that conditions the exercise of China's sovereignty in exchange
for the benefits it derives as a Member of the WTO. 585 Referring to China's contention that it is
entitled to invoke Article XX exceptions for viol ations of Paragraph 11.3 of China's Accession
Protocol in the absence of "specific treaty langua ge", the United States and Mexico assert that this
would render the introductory clause in Paragra ph 5.1, and the references to the GATT 1994 in
Paragraphs 11.1 and 11.2 of China' s Accession Protocol, "superfluous". 586 The United States and
Mexico emphasize that the Appellate Body's finding in China – Publications and Audiovisual
Products that Article XX is available for violations of Paragraph 5.1 of China's Accession Protocol
was "grounded" in the language of Paragraph 5.1 and is not a right to regulate trade in the
"abstract".587 The United States and Mexico note that the language in Paragraph 11.3 is in "contrast"
to the language in the accession documents of other WTO Members with respect to their obligations
on export duties. 588 They further assert that China's right to promote non-trade interests is not "at
risk" in this dispute, and that there are a number of ways in which China may pursue such interests. 589
Specifically, they argue that Paragraph 11.3 do es not prevent China from adopting measures other
than export duties to promote legitimate public h ealth or conservation objectives, and suggest that
China has a number of "tools at its disposal" to pursue these ends.590
302. The European Union argues that China exercised its inherent right to regulate trade when it
completed the accession process and became a Member of the WTO. According to the
European Union, the provisions of the covered ag reements and China's Accession Protocol in fact
"delineate" China's exercise of its inherent and sovereign right to regulate trade. 591 T h e
European Union also highlights the Panel's finding that there is no contradiction between China's

584Joint appellees' submission of the United States and Mexico, para. 142 (referring to Appellate Body
Report, China – Publications and Audiovisual Products, para. 222).
585Joint appellees' submission of the United States and Mexico, paras. 143 and 144 (referring to
Appellate Body Report, Japan – Alcoholic Beverages II, p. 15, DSR 1996:I, 97, at 108).
586Joint appellees' submission of the United States and Mexico, para. 145.
587Joint appellees' submission of the United States and Mexico, para. 145 (referring to Appellate Body
Report, China – Publications and Audiovisual Products, paras. 219-228).
588Joint appellees' submission of the United States and Mexico, para. 145 (referring to Report of the
Working Party on the Accession of Ukraine, WT/ACC/UKR/152, paras. 240 and 512).
589Joint appellees' submission of the United States and Mexico, para. 149.
590Joint appellees' submission of the United States and Mexico, para. 150.
591European Union's appellee's submission, para. 109.

inherent right to regulate trade and the comm itments undertaken by China in its Accession
Protocol.
592 The European Union further argues that China's obligation under Paragraph 11.3 of the
Accession Protocol should not be viewed in isolatio n, because it is "only a small part" of the rights
and obligations that China "entered into and acquired" through its WTO accession.593
303. We note, as did the Panel, that WTO Members have, on occasion, "incorporated, by
cross-reference, the provisions of Article XX of the GATT 1994 into other covered agreements". 594
For example, Article 3 of the Agreement on Trade-Related Investment Measures (the
"TRIMs Agreement") explicitly incorporates the right to invoke th e justifications of Article XX of the
GATT 1994, stating that "[a]ll exceptions under GATT 1994 shall apply, as appropriate, to the
provisions of this Agreement". In the present case , we attach significance to the fact that
Paragraph 11.3 of China's Accession Protocol expres sly refers to Article VIII of the GATT 1994, but
does not contain any reference to other provisions of the GATT 1994, including Article XX.
304. In China – Publications and Audiovisual Products, in the context of assessing a claim brought
under Paragraph 5.1 of China's Accession Protocol , the Appellate Body found that China could
invoke Article XX(a) of the GATT 1994 to justify provi sions found to be inconsistent with China's
trading rights commitments under its Accession Protocol and Accession Working Party Report. In
reaching this finding, the Appellate Body relied on the language contained in the introductory clause
of Paragraph 5.1, which states "[w]ithout prejudi ce to China's right to regulate trade in a manner
consistent with the WTO Agreement ".
595 As noted by the Panel, such language is not found in
Paragraph 11.3 of China's Accessi on Protocol. We therefore do not agree with China to the extent
that it suggests that the Appellate Body's findings in China – Publications and Audiovisual Products
indicate that China may have recourse to Article XX of the GATT 1994 to justify export duties that
are inconsistent with Paragraph 11.3.

593European Union's appellee's submission, para. 114.
594Panel Reports, para. 7.153.
595The Appellate Body referred to the question before it as being to assess whether "the introductory
clause of paragraph 5.1 allows China to assert a defence under Article XX(a)". (Appellate Body Report, China –
Publications and Audiovisual Products , para. 215) The Appellate Body ch aracterized China's obligation under
Paragraph 5.1 as "a commitment in respect of traders, in the form of a commitment to grant to all enterprises in
China the right to import and export goods." ( Ibid., para. 226) The Appellate Body added, however, that this
commitment is qualified by the introductory clause of Paragraph 5.1. On the basis of the introductory clause to
Paragraph 5.1, the Appellate Body found that China's right to regulate trade "may not be impaired by China's
obligation to grant the right to trade, provided that China regulates trade 'in a manner consistent with the
WTO Agreement'". (Ibid., para. 221)

305. China refers to language contained in the preambles of the WTO Agreement, the GATT 1994,
and the Agreement on the Application of Sanitary and Phytosanitary Measures (the
"SPS Agreement"), Agreement on Technical Barriers to Trade (the "TBT Agreement"), the Agreement
on Import Licensing Procedures (the " Import Licensing Agreement "), the GATS, and the Agreement
on Trade-Related Aspects of Intellectual Property Rights (the " TRIPS Agreement") to argue that the
Panel distorted the balance of rights and obligatio ns established in China's Accession Protocol by
assuming that China had "abandon[ed]" its right to impose export duties "to promote fundamental
non-trade-related interests, such as conservation and public health."
596
306. The preamble of the WTO Agreement lists various objectives, including "raising standards of
living", "seeking both to protect and preserve the environment" and "expanding the production of and
trade in goods and services, while allowing for the optimal use of the world's resources in accordance
with the objective of sustainable development." The preamble concludes with the resolution "to
develop an integrated, more viable and durable mu ltilateral trading system". Based on this language,
we understand the WTO Agreement , as a whole , to reflect the balance struck by WTO Members
between trade and non-trade-related concerns. However, none of th e objectives listed above, nor the
balance struck between them, provides specific guidance on the question of whether Article XX of the
GATT 1994 is applicable to Paragra ph 11.3 of China's Accession Protocol. In the light of China's
explicit commitment contained in Paragraph 11.3 to eliminate export duties and the lack of any
textual reference to Article XX of the GATT 1994 in that provision, we see no basis to find that
Article XX of the GATT 1994 is applicable to export duties found to be inconsistent with
Paragraph 11.3.
5. Conclusion
307. In our analysis above, we have, in accordance with Article 3.2 of the DSU, applied the
customary rules of interpretation of public international law as codified in the Vienna Convention in a
holistic manner to ascertain whether China may have recourse to the provisions of Article XX of the
GATT 1994 to justify export duties that are found to be inconsistent with Pa ragraph 11.3 of China's
Accession Protocol. As we have found, a prope r interpretation of Paragraph 11.3 of China's
Accession Protocol does not make available to China the exceptions under Article XX of the
GATT 1994. Consequently, we find that the Panel did not err, in paragraph 7.159 of the Panel
Reports, in finding that "there is no basis in Chin a's Accession Protocol to allow the application of
Article XX of the GATT 1994 to China's obligations in Paragraph 11.3 of th e Accession Protocol."

We therefore uphold the Panel's conclusion, in paragraphs 8.2(b), 8.9(b), and 8.16(b) of the Panel
Reports, that China may not seek to justify the ap plication of export duties to certain forms of
fluorspar pursuant to Article XX(g) of the GATT 1994 and the Panel's conclusion, in
paragraphs 8.2(c), 8.9(c), and 8. 16(c) of the Panel Reports, that China may not seek to justify the
application of export duties to certain forms of magnesium, manganese and zinc pursuant to
Article XX(b) of the GATT 1994.
VII. Article XI:2(a) of the GATT 1994
308. We turn next to China's appeal of the Panel's finding that China had not demonstrated that its
export quota on refractory-grade bauxite was "tem porarily applied", within the meaning of
Article XI:2(a) of the GATT 1994, to either prevent or relieve a "critical shortage".
597 China alleges
that the Panel erred in its interpretation and app lication of Article XI:2(a) of the GATT 1994, and
acted inconsistently with Article 11 of the DSU.
A. The Panel's Findings and Arguments on Appeal
309. The Panel found that China's export quota on refr actory-grade bauxite is inconsistent with
Article XI:1 of the GATT 1994. China argued that this export quota is a restriction temporarily
applied to prevent or relieve a critical shortage of an essential product in the sense of Article XI:2(a)
of the GATT 1994 and that it therefore does not fa ll within the scope of Article XI:1's general
prohibition of quantitative restrictions. The Pane l determined, however, that China had failed to
demonstrate that the export quota applied to re fractory-grade bauxite is justified pursuant to
Article XI:2(a).
598 In reaching this conclusion, the Panel agreed with China that "refractory-grade
bauxite is currently 'essential' to China, as that term is used in Article XI:2(a)". 599 The Panel found,
however, that China had failed to demonstrate that the export quota was "temporarily applied" within
the meaning of Article XI:2(a). 600 The Panel also found that China had failed to demonstrate that
there was a "critical shortage" of refractory-grade bauxite in China.601
310. With respect to the "temporarily applied" requi rement, the Panel found, based on the ordinary
meaning of the word "temporarily", that Article XI:2(a) permits measures that are applied for a

597Panel Reports, para. 7.355. China also refers to paragraphs 7.257, 7.258, 7.297-7.302, 7.305, 7.306,
7.346, 7.349, 7.351, and 7.354 of the Panel Reports. (See China's appellant's submission, paras. 299 and 388)
598Panel Reports, para. 7.353.
599Panel Reports, para. 7.340.
600Panel Reports, para. 7.346.
601Panel Reports, para. 7.351.

"limited timeframe".
602 The Panel considered Article XX(g) of the GATT 1994 as relevant context,
and pointed to "additional protections" in the chap eau of that Article that limit Members' actions. 603
In the Panel's view, the absence of such additional limitations in Article XI:2(a) suggested that a
restriction justified under Article XI:2(a) must be of a limited duration, because otherwise Members
could resort indistinguishably to either Article XI :2(a) or Article XX(g) to address the problem of an
exhaustible natural resource.604 The Panel added that, "[i]f Article XI:2(a) were interpreted to permit
the long-term application of measures in the nature of China's export restrictions on refractory grade
bauxite, the import of Article XX(g) would be very much undermined, if not rendered redundant".605
311. Turning to the facts of the present case, the Pane l observed that China's restriction on exports
of refractory-grade bauxite had "already been in place for at least a decade with no indication of when
it will be withdrawn and every indication that it will remain in place until the reserves have been
depleted".606 On this basis, the Panel found that China's export quota could not be considered
"temporarily applied" to address a critical shortage within the meaning of Article XI:2(a).607
312. With regard to the meaning of the phrase "to prevent or relieve critical shortages" in
Article XI:2(a), the Panel reviewed dictionary de finitions of the terms "to prevent", "to relieve",
"shortage", and "critical".608 The Panel also considered that th e requirement that measures be applied
"temporarily" contextually informs the notion of "criti cal shortage". The Panel reasoned that, if there
was no possibility for an existing shortage ever to cease to exist, it would not be possible to "relieve or
prevent" it through an export restriction applied on a temporary basis. The Panel added that the
temporal focus of "critical shortage" as interpreted by the Panel "seems consis tent with the notion of
'critical', defined as 'of the nature of, or constituting, a crisis'".609
313. In its application of Article XI:2(a) in the pr esent case, the Panel was not persuaded that there
was a "critical shortage" of refractory-grade bauxite in China. The Panel expressed the view that,
even if it were to accept China's assertion that na tural reserves of refractory-grade bauxite would be
depleted in 16 years, as contended by China, this would not demonstrate a situation "of decisive

603Panel Reports, para. 7.258.
604Panel Reports, paras. 7.256-7.258.
605Panel Reports, para. 7.298.
606Panel Reports, para. 7.350.
607Panel Reports, para. 7.350.
608Panel Reports, paras. 7.294-7.296.
609Panel Reports, para. 7.297.

importance", or one that is "grave", rising to the level of a "crisis".
610 The Panel concluded therefore
that China had not demonstrated the existence of a "critical shortage" of refractory-grade bauxite.
Accordingly, the Panel found that China had failed to demonstrate that the export quota applied to
refractory-grade bauxite was justified pursuant to Article XI:2(a) of the GATT 1994.611
314. On appeal, China claims that the Panel erre d in its interpretation and application of
Article XI:2(a) of the GATT 1994. In particular, China alleges that the Panel erred in interpreting and
applying the term "temporarily" and in interpreting the term "critical shortages" in Article XI:2(a) of
the GATT 1994. First, with respect to the Panel' s interpretation of the term "temporarily", China
asserts that the Panel erred in excluding "lo ng-term" export restrictions from the scope of
Article XI:2(a). Second, China alleges that the Pane l failed to take into consideration the fact that
China's export quota on refractory-grade bauxite is subj ect to annual review and therefore erred in its
application of the term "temporarily" to the facts of this case. Third, China maintains that the Panel
erred by interpreting the term "critical shortages" to exclude shortages caused by the "finite" nature or
"limited reserve[s]" of a product. 612 Finally, China advances two separate claims that the Panel failed
to make an objective assessment of the matter pursuant to Article 11 of the DSU.
315. In response, the United States, the European Union, and Mexico request the Appellate Body
to uphold the Panel's finding that China had not demonstrated that its export quota on refractory-grade
bauxite is temporarily applied to prevent or re lieve a critical shortage within the meaning of
Article XI:2(a) of the GATT 1994. The European Union argues that China misunderstands the
Panel's statements that Article XI :2(a) should not be interpreted to permit the "long-term application
of conservation measures", or "long-term measures related to conservation purposes" 613, because in
making these statements the Panel was focusing on conservation measures and not on export
restrictions in general. 614 With respect to China's allegation th at the Panel failed to consider that
China's export restriction on refractory-grade bauxite is annually renewed, the European Union argues
that this does not have an impact on whether the measure is "temporarily" applied, because the
measure has effectively been in place for more than ten years.

610Panel Reports, para. 7.351. We note that the United States and Mexico contested the accuracy of
China's estimate of a 16-year remaining reserve lifespan for refractory-grade bauxite, and submitted instead that
the remaining lifespan was 91 years. (United States' s econd written submission to the Panel, para. 235;
Mexico's second written submission to the Panel, para. 23 9; Panel Exhibit JE-165, p. 23) The Panel made no
finding concerning the remaining lifespan of refractory-grade bauxite, but found that, even assuming China's
assertion of a 16-year remaining reserve lifespan was correct, this would not demonstrate a situation of "crisis".
611Panel Reports, para. 7.353.
612China's appellant's submission, para. 356 (quoting Panel Reports, paras. 7.297 and 7.305).
614European Union's appellee's submission, para. 175.

316. The United States and Mexico disagree with Ch ina's allegation that the Panel excluded from
the scope of Article XI:2(a) any "long-term" applic ation of export restrictions. For them, the Panel
did not interpret the words "temporarily applied" so as to impose an "absolute limit" on the time
period for which an export restraint may be imposed under Article XI:2(a).
615 Furthermore, the
United States and Mexico disagree with China that the Panel erred in interpreting Article XI:2(a) "to
exclude shortages caused, in part, by the e xhaustibility of the product subject to the export
restriction".616 They submit that the Panel correctly interp reted the term "critical shortage", because
the existence of a limited amount of reserves cons titutes only a degree of shor tage, and a mere degree
of shortage does not constitute a "critical" shortage, which is one rising to the level of a crisis. 617 The
European Union, Mexico, and the United States also request the A ppellate Body to reject China's
claim that the Panel acted inconsistently with its obligations under Article 11 of the DSU.
317. China's appeal therefore requires us to assess the Panel's interpretation of the terms
"temporarily applied" and "critical shortages" in Article XI:2(a) of the GATT 1994, and then to
consider whether the Panel properly assessed the e xport quota imposed on refractory-grade bauxite in
the light of those interpretations.
B. Article XI:2(a) of the GATT 1994
318. Article XI of the GATT 1994 provides, in relevant part:
General Elimination of Quantitative Restrictions
1. No prohibitions or restrictions other than duties, taxes or
other charges, whether made effective through quotas, import or
export licences or other measures, shall be instituted or maintained
by any contracting party on the importation of any product of the
territory of any other contracting party or on the exportation or sale
for export of any product destined for the territory of any other
contracting party.
2. The provisions of paragraph 1 of this Article shall not extend
to the following:
(a) Export prohibitions or restrictions temporarily applied to
prevent or relieve critical shortag es of foodstuffs or other products
essential to the exporting contracting party[.]

615Joint appellees' submission of the United States and Mexico, paras. 171 and 172.
616Joint appellees' submission of the United States and Mexico, para. 173 (quoting China's appellant's
submission, para. 356).
617Joint appellees' submission of the United States and Mexico, para. 175.

319. Article XI:2 refers to the gene ral obligation to eliminate quantitative restrictions set out in
Article XI:1 and stipulates that the provisions of Ar ticle XI:1 "shall not extend" to the items listed in
Article XI:2. Article XI:2 must therefore be read together with Article XI:1. Both Article XI:1 and
Article XI:2(a) of the GATT 1994 refer to "prohibitions or restrictions". The term "prohibition" is
defined as a "legal ban on the trade or importation of a specified commodity".
618 The second
component of the phrase "[e]xport prohibitions or r estrictions" is the noun "restriction", which is
defined as "[a] thing which restricts someone or something, a limitation on action, a limiting condition
or regulation"619, and thus refers generally to something that has a limiting effect.
320. In addition, we note that Article XI of th e GATT 1994 is entitled "General Elimination of
Quantitative Restrictions". 620 The Panel found that this title suggests that Article XI governs the
elimination of "quantitative restrictions" generally. 621 We have previously referred to the title of a
provision when interpreting the requirements within the provision. 622 In the present case, we consider
that the use of the word "quantitative" in the title of the provision informs the interpretation of the
words "restriction" and "prohibition" in Article XI:1 and XI:2. It suggests that Article XI of the
GATT 1994 covers those prohibitions and restrictions that have a limiting effect on the quantity or
amount of a product being imported or exported.
321. Turning to the phrase "[e]xport prohibitions or r estrictions" in Article XI:2(a), we note that
the words "prohibition" and "restriction" in that subparagraph are both qualified by the word "export".
Thus, Article XI:2(a) covers any measure prohibiti ng or restricting the exportation of certain goods.
Accordingly, we understand the words "prohibitions or restrictions" to refer to the same types of
measures in both paragraph 1 and s ubparagraph 2(a), with the difference that subparagraph 2(a) is
limited to prohibitions or restrictions on exportati on, while paragraph 1 also covers measures relating
to importation. We further note that "duties, tax es, or other charges" are excluded from the scope of
Article XI:1. Thus, by virtue of the link between Article XI:1 and Article XI:2, the term "restrictions"
in Article XI:2(a) also excludes "duties, taxes, or ot her charges". Hence, if a restriction does not fall
within the scope of Article XI:1, then Article XI:2 will also not apply to it.

618Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 2363.
619Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 2553.
620Emphasis added.
621Panel Reports, para. 7.912.
622See Appellate Body Report, US – Softwood Lumber IV , para. 93; and Appellate Body Report, US –
Carbon Steel, para. 67.

322. Having examined the meaning of the phrase "[e] xport prohibitions or restrictions", we note
that Article XI:2(a) permits such measures to be "temporarily applied to prevent or relieve critical
shortages of foodstuffs or other products essen tial to the exporting Member". We examine the
meaning of each of these concepts—"temporarily app lied", "to prevent or relieve critical shortages",
and "foodstuffs or other products essential"—in turn below.
323. First, we note that the term "temporarily" in Article XI:2(a) of the GATT 1994 is employed as
an adverb to qualify the term "applied". The word "temporary" is defined as "[l]asting or meant to
last for a limited time only; not permanent; made or arranged to supply a passing need".
623 Thus,
when employed in connection with the word "app lied", it describes a measure applied for a limited
time, a measure taken to bridge a "passing need". As we see it, the definitional element of
"supply[ing] a passing need" suggests that Article XI:2 (a) refers to measures that are applied in the
interim.
324. Turning next to consider the meaning of the term "critical shortage", we note that the noun
"shortage" is defined as "[d]eficienc y in quantity; an amount lacking"
624 and is qualified by the
adjective "critical", which, in turn, is defined as "[o]f, pertaining to, or constituting a crisis; of
decisive importance, crucial; involving risk or suspense". 625 The term "crisis" describes "[a] turning-
point, a vitally important or decisive stage; a time of trouble, danger or suspense in politics,
commerce, etc."626 Taken together, "critical shortage" thus refers to those deficiencies in quantity that
are crucial, that amount to a situation of decisive importance, or that reach a vitally important or
decisive stage, or a turning point.
325. We consider that context lends further support to this reading of the term "critical shortage".
In particular, the words "general or local shor t supply" in Article XX(j) of the GATT 1994 provide
relevant context for the interpretation of the term "c ritical shortage" in Article XI:2(a). We note that
the term "in short supply" is defined as "available only in limited quantity, scarce". 627 T h u s , i t s
meaning is similar to that of a "shortage", which is defined as "[d]eficiency in quantity; an amount

623Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 3204.
624Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 2813.
625Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 1, p. 562.
626Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 1, p. 561.
627Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 3115.

lacking".
628 Contrary to Article XI:2(a), however, Article XX(j) does not include the word "critical",
or another adjective further qualifying the short supply . We must give meaning to this difference in
the wording of these provisions. To us, it suggests that the kinds of shortages that fall within
Article XI:2(a) are more narrowly circumscribed than those falling within the scope of Article XX(j).
326. For Article XI:2(a) to apply, the shortage, in tu rn, must relate to "foodstuffs or other products
essential to the exporting Member". Foodstuff is de fined as "an item of food, a substance used as
food".629 The term "essential" is defined as "[ a]bsolutely indispensable or necessary". 630
Accordingly, Article XI:2(a) refers to critical shortages of foodstuffs or otherwise absolutely
indispensable or necessary products. By incl uding, in particular, the word "foodstuffs",
Article XI:2(a) provides a measure of what might be considered a product "essential to the exporting
Member" but it does not limit the scope of other essential products to only foodstuffs.
327. Article XI:2(a) allows Members to apply prohibitio ns or restrictions temporarily in order to
"prevent or relieve" such critical shortages. The word "prevent" is defined as "[p]rovide beforehand
against the occurrence of (something); make impracti cable or impossible by anticipatory action; stop
from happening". 631 The word "relieve" means "[r]aise out of some trouble, difficulty or danger;
bring or provide aid or assistance to". 632 We therefore read Article XI:2(a) as providing a basis for
measures adopted to alleviate or reduce an existi ng critical shortage, as well as for preventive or
anticipatory measures adopted to pre-empt an imminent critical shortage.
328. Finally, we consider that Article XI:2(a) must be interpreted so as to give meaning to each of
the concepts contained in that provision. At the same time, we must take into account that these
different concepts impart meaning to each other, an d thus define the scope of Article XI:2(a). For
example, whether a shortage is "critical" may be in formed by how "essential" a particular product is.
In addition, the characteristics of the product as well as factors pertaining to a critical situation, may
inform the duration for which a measure can be main tained in order to bridge a passing need in
conformity with Article XI:2(a). Inherent in the notion of criticality is the expectation of reaching a

628Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 2813.
629Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 1, p. 1008.
630Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 1, p. 865.
631Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 2341.
632Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 2522.

point in time at which conditions are no longer "cr itical", such that measures will no longer fulfil the
requirement of addressing a critical shortage. Acco rdingly, an evaluation of whether a particular
measure satisfies the requirements of Article XI :2(a) necessarily requires a case-by-case analysis
taking into consideration the nexus between the different elements contained in Article XI:2(a).
C. The Panel's Evaluation of China's Export Quota on Refractory-Grade Bauxite
329. As noted above, China argues that the Panel er red in finding that China had not demonstrated
that its export quota on refractory-grade bauxite w as "temporarily applied", within the meaning of
Article XI:2(a) of the GATT 1994, to either prevent or relieve a "critical shortage". With respect to
the Panel's interpretation of the term "temporarily", China supports the Panel's finding that the word
"temporarily" "suggest[s] a fixed time-limit for the application of a measure".
633 China, however,
alleges that the Panel subsequently "adjusted" its interpretation of the term "temporarily" to exclude
the "long-term" application of export restrictions. 634 China argues that the term "temporarily" does
not mark a "bright line" 635 moment in time after which an export restriction has necessarily been
maintained for too long. Instead, Article XI:2(a) re quires that the duration of a restriction be limited
and bound in relation to the achievement of the stated goal. Furthermore, China argues that the Panel
erroneously found that Article XI:2(a) and Article XX( g) are mutually exclusive, and that this finding
was a significant motivating factor for the Panel's er roneous interpretation of the term "temporarily"
in Article XI:2(a). China submits that the two pr ovisions are not mutually exclusive, and instead
apply cumulatively.636
330. We note that the Panel found that the word "t emporarily" suggests "a fixed time-limit for the
application of a measure" 637, and also expressed the view that a "restriction or ban applied under
Article XI:2(a) must be of a li mited duration and not indefinite". 638 We have set out above our
interpretation of the term "temporarily" as employed in Article XI:2(a). In our view, a measure
applied "temporarily" in the sense of Article XI:2(a ) is a measure applied in the interim, to provide
relief in extraordinary conditions in order to bridge a passing need. It must be finite, that is, applied

636China's appellant's submission, para. 375 (referring to Appellate Body Report, Argentina – Footwear
(EC), para. 81; Appellate Body Report, Chile – Price Band System , para. 186; Appellate Body Report, EC –
Asbestos, para. 80; Panel Reports, EC – Bananas III , para. 7.160; Appellate Body Report, Korea – Dairy ,
637Panel Reports, para. 7.255.
638Panel Reports, para. 7.258.

for a limited time. Accordingly, we agree with the Panel that a restriction or prohibition in the sense
of Article XI:2(a) must be of a limited duration and not indefinite.
331. The Panel further interpreted the term "lim ited time" to refer to a "fixed time-limit"
639 for the
application of the measure. To the extent that the Panel was referring to a time-limit fixed in advance,
we disagree that "temporary" must always connot e a time-limit fixed in advance. Instead, we
consider that Article XI:2(a) describes measures ap plied for a limited duration, adopted in order to
bridge a passing need, irrespective of whether or not the temporal scope of the measure is fixed in
advance.
332. China alleges that the Panel erred in readi ng the term "temporarily" to exclude the "long-
term" application of export restrictions. In partic ular, China refers to the Panel's statements that
Article XI:2(a) cannot be interpreted "to permit the long-term application of … export restrictions", or
to "permit long-term measures to be imposed". 640 We consider that the te rms "long-term application"
and "long-term measures" provide little value in elucidating the meaning of the term "temporary",
because what is "long-term" in a given case depends on the facts of the particular case. Moreover, the
terms "long-term" and "short-term" describe a different concept th an the term "temporary", employed
in Article XI:2(a). Viewed in the context of the Panel's entire analysis, it is clear, however, that the
Panel used these words to refer back to its earlier interpretation of the term "temporarily applied" as
meaning a "restriction or prohibition for a limited time". Because the Panel merely referred to its
earlier interpretation of the term "temporarily app lied" and did not provide additional reasoning, the
Panel cannot be viewed as having "adjusted" its interpretation of the term "temporarily" to exclude the
"long-term" application of export restrictions.
333. This brings us to China's allegation that the Panel erroneously found th at Article XI:2(a) and
Article XX(g) are mutually exclusive, and that th is finding was a significant motivating factor for the
Panel's erroneous interpretation of the term "temporarily" in Article XI:2(a).641 As we see it, the Panel
considered Article XX(g) as relevant context in its interpretation of Article XI:2(a). It noted that
Article XX(g) "incorporates additional protections in its chapeau to ensure that the application of a
measure does not result in arbitrary or unjustifiable discrimination or amount to a disguised restriction
on international trade".642 The Panel considered that the existence of these further requirements under

639Panel Reports, para. 7.255.
640China's appellant's submission, para. 336 (quo ting Panel Reports, paras. 7.298 and 7.305,
642Panel Reports, para. 7.258.

Article XX(g) lent support to its interpretation that an exception pursuant to Article XI:2(a) must be of
a limited duration and not indefinite, because otherw ise Members could resort indistinguishably to
either Article XI:2(a) or to Article XX(g). We do not understand the Panel to have found that these
two provisions are mutually exclusive. Rather , the Panel sought to confirm the result of its
interpretation, and stated that the interpretation pr offered by China would be inconsistent with the
principle of effective treaty interpretation. We therefore see no merit in China's allegation that the
Panel erroneously found that Article XI:2(a) and Ar ticle XX(g) are mutually exclusive. Nor do we
agree that such a finding was a basis for the Pa nel's interpretation of the term "temporarily" in
Article XI:2(a).
334. In any event, we have some doubts as to th e validity of the Panel's concern that, if
Article XI:2(a) is not interpreted as confined to measures of limited duration, Members could "resort
indistinguishably to either Article XI:2(a) or to Article XX(g) to address the problem of an
exhaustible natural resource".
643 Members can resort to Article XX of the GATT 1994 as an
exception to justify measures that would otherwise be inconsistent with their GATT obligations. By
contrast, Article XI:2 provides that the gene ral elimination of quantitative restrictions shall not extend
to the items listed under subparagraphs (a) to (c) of that provision. This language seems to indicate
that the scope of the obligation not to impos e quantitative restrictions itself is limited by
Article XI:2(a). Accordingly, where the requireme nts of Article XI:2(a) are met, there would be no
scope for the application of Article XX, because no obligation exists.
335. Turning then to the Panel's application of the term "temporarily applied" in the present case,
China alleges that the Panel failed to take into consideration the fact that China's export restrictions on
refractory-grade bauxite are subject to annual review . China faults the Panel for "simply assum[ing]"
that China's restriction on exports of refractory- grade bauxite will be maintained indefinitely. 644
China submits that, at the close of each year, the factual circumstances are assessed in the light of the
legal standard set forth in Article XI:2(a) to establish whether the export restriction should be
maintained. We note that China has made parallel claims, under Article XI:2(a), alleging an error of
application, and under Article 11 of the DSU, a lleging that the Panel failed to make an objective
assessment of the facts. We consider China's allegation that the Panel "simply assumed" something to

643Panel Reports, para. 7.257.
644China's appellant's submission, para. 349. In support, China also quoted the Panel's statement at
paragraph 7.350 of its Reports that there is "every indication that [China's restriction on exports of refractory-
grade bauxite] will remain in place until the reserves have been depleted".

be more in the nature of a claim made under Artic le 11 of the DSU, and therefore address it below at
the end of our analysis in this section.
336. China further argues that the Panel erred in its interpretation and application of
Article XI:2(a) by presuming that export restricti ons "imposed to address a limited reserve of an
exhaustible natural resource" cannot be "temporar y" and that a shortage of an exhaustible non-
renewable resource cannot be "critical".
645 The Panel reasoned that, "if there is no possibility for an
existing shortage ever to cease to exist, it will not be possible to 'relieve or prevent' it through an
export restriction applied on a temporary basis." 646 The Panel further stated that, "[i]f a measure were
imposed to address a limited reserve of an exhaus tible natural resource, such measure would be
imposed until the point when the resource is fully depleted." 647 The Panel added that "[t]his temporal
focus seems consistent with the no tion of 'critical', defined as 'of the nature of, or constituting, a
crisis'".648
337. We do not agree with China that these statem ents by the Panel indicate that the Panel
presumed that a shortage of an exhaustible non-re newable resource cannot be "critical" within the
meaning of Article XI:2(a). 649 The Panel noted instead, correctly in our view, that the reach of
Article XI:2(a) is not the same as that of Article XX(g), adding that these provisions are "intended to
address different situations and thus must mean different things". 650 Articles XI:2(a) and XX(g) have
different functions and contain di fferent obligations. Article XI:2(a) addresses measures taken to
prevent or relieve "critical shortages" of foodstuffs or other essential products. Article XX(g), on the
other hand, addresses measures relating to the conser vation of exhaustible na tural resources. We do
not exclude that a measure falling within the ambit of Article XI:2(a) could relate to the same product
as a measure relating to the conservation of an exha ustible natural resource. It would seem that
Article XI:2(a) measures could be imposed, for exam ple, if a natural disaster caused a "critical
shortage" of an exhaustible natura l resource, which, at the same time, constituted a foodstuff or other
essential product. Moreover, because the reach of Article XI:2(a) is different from that of
Article XX(g), an Article XI:2(a) measure might operate simultaneously with a conservation measure
complying with the requirements of Article XX(g).651

645China's appellant's submission, paras. 356 and 367 (quoting Panel Reports, 7.297).
646Panel Reports, para. 7.297.
647Panel Reports, para. 7.297.
648Panel Reports, para. 7.297.
649China's appellant's submission, paras. 367 (quoting Panel Reports, para. 7.297).
650Panel Reports, para. 7.300.
651European Union's appellee's submission, para. 166.

338. As a final matter, we note that China advances two separate claims that the Panel failed to
make an objective assessment of the matter pursuant to Article 11 of the DSU. First, China alleges
that the Panel failed properly to assess evidence that China's export restriction is annually reviewed
and renewed, and that the Panel's failure to consider this evidence has a bearing on the objectivity of
the Panel's factual assessment.
652 China submits that evidence re lating to China's annual review
procedures demonstrates that the export restriction w ill be maintained only as long as it is justified to
prevent or relieve the critical shortage of refr actory-grade bauxite. For China, this evidence
demonstrates that the Panel erred in assuming th at the restriction "will remain in place until the
reserves have been depleted".653
339. We note that the Panel identified several reasons for finding that China's export restriction is
not temporarily applied to prevent or relieve a cr itical shortage. The Panel observed that China's
restriction on exports of refractory-grade bauxite had "already been in place for at least a decade with
no indication of when it will be withdrawn and ever y indication that it will remain in place until the
reserves have been depleted". 654 The Panel also referred to evid ence of the existence of an export
quota submitted by the parties 655, as well as China's explanation that its "export quota on refractory-
grade bauxite forms part of a conservation plan aimed at extending the reserves of refractory-grade
bauxite".
656
340. To us, these elements of the Panel's reasoning indicate that the Panel's finding was not, as
China alleges, based on a mere "assumption" that the restriction would remain in effect until depletion
of the reserves. Instead, the Panel considered ev idence indicating that the measure had been in place
for at least a decade and China does not contest th e Panel's finding that this was the case. In
particular, the Panel noted that "China has ha d an export quota in pl ace on exports of bauxite
classifiable under HS No. 2508.3000 dating back to at least 2000" and found that "China's estimation
of a 16-year reserve for bauxite suggests that China intends to maintain its measure in place until the
exhaustion of remaining reserves (in keeping w ith its contention that it needs to restrain
consumption), or until new technology or conditio ns lessen demand for refractory-grade bauxite." 657
In addition, as an indication that the restrictions would remain in place until depletion, the Panel noted

654Panel Reports, para. 7.350.
655In particular, footnote 563 to paragraph 7.348 of the Panel Reports demonstrates that the Panel relied
on evidence regarding the existence of the export quota.
656Panel Reports, para. 7.348 (referring to China's second written submission to the Panel, para. 141).
657Panel Reports, para. 7.348.

China's explanation that its export quota on refractor y-grade bauxite forms part of a conservation plan
aimed at extending the reserves of refractory-grade bauxite.
341. China's argument appears to be directed mainly at the weight the Pane l ascribed to evidence
indicating that the export restriction is annually reviewed and renewed. The Appellate Body has
consistently recognized that panels enjoy a marg in of discretion in their assessment of the facts.
658
This margin includes the discretion of a panel to decide which evidence it chooses to utilize in making
its findings659, and to determine how much weight to att ach to the various items of evidence placed
before it by the parties. 660 A panel does not err simply because it declines to accord to the evidence
the weight that one of the parties believes should be accorded to it. 661 A panel is entitled "to
determine that certain elements of evidence shoul d be accorded more weight than other elements—
that is the essence of the task of appreciating the evidence". 662 We therefore reject China's claim that
the Panel failed to make an objective assessment of the matter as required by Article 11 of the DSU.
342. Next, China asserts that the Panel employed intern ally inconsistent or incoherent reasoning in
stating, on the one hand, that "there is no possibility for an existing shortage [of an exhaustible natural
resource] ever to cease to exist" su ch that "it will not be possible to 'relieve or prevent' it through an
export restriction applied on a temporary basis" 663 and acknowledging, on the other hand, that
"advances in reserve detection or extraction techni ques", or the availability of "additional capacity",
could "alleviate or eliminate" a shortage of an exhaustible natural resource664, or that "new technology
or conditions" might "lessen demand" for the resource.665
343. The Appellate Body has previously found that a Panel's reasoning may be so internally
inconsistent that it amounts to a breach of Article 11 of the DSU. 666 We do not consider this to be the
case here. Contrary to what China suggests, the Pane l did not find that "'there is no possibility for an
existing shortage [of an exhaustible natural resource] ever to cease to exist', such that 'it will not be

658Appellate Body Report, EC – Asbestos , para. 161; Appellate Body Report, EC – Hormones ,
para. 132; Appellate Body Report, EC – Sardines , para. 299; Appellate Body Report, Japan – Apples ,
para. 222; Appellate Body Report, Korea – Dairy , paras. 137 and 138; Appellate Body Report, US – Wheat
Gluten, para. 151.
661Appellate Body Report, Australia – Salmon , para. 267; Appellate Body Report, Japan – Apples ,
663China's appellant's submission, para. 373 (referring to Panel Reports, para. 7.297). (emphasis added
by China omitted)
665China's appellant's submission, para. 373 (referring to Panel Reports, paras. 7.348 and 7.351).
666Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 894.

possible to 'relieve or prevent' it through an export restriction applied on a temporary basis'".
667
Instead, the Panel's statement to wh ich China refers contains a hypothetical. It reads as follows: " if
there is no possibility for an existing shortage ever to cease to exist, it will not be possible to 'relieve
or prevent' it through an export restriction applied on a temporary basis." 668 The Panel did not make
such a finding but employed a hypothetical and di d not, as China alleges, make two internally
inconsistent findings. Therefore, the Panel did not fail to conduct an objective assessment of the
matter pursuant to Article 11 of the DSU.
344. For the above reasons, we uphold the Panel's conclusion that China did not demonstrate that
its export quota on refractory-grade bauxite was "temporarily applied", within the meaning of
Article XI:2(a) of the GATT 1994, to either prevent or relieve a "critical shortage" 669, and we dismiss
China's allegation that the Panel acted inconsistent ly with its duty to conduct an objective assessment
of the matter as required by Article 11 of the DSU.
VIII. Article XX(g) of the GATT 1994
345. China alleges that the Panel erred in interp reting the phrase "made effective in conjunction
with" in Article XX(g) to mean that restricti ons on domestic production or consumption must "be
applied jointly with the challenged export restri ctions", and that "the purpose of those export
restrictions must be to ensure the effectiveness of those domestic restrictions".670
A. The Panel's Findings and Arguments on Appeal
346. The Panel found that China's export quota on refr actory-grade bauxite is inconsistent with
Article XI:1 of the GATT 1994. China sought to ju stify this export quota pursuant to Article XX(g)
of the GATT 1994, arguing that refractory-grade bauxite is an exhaustible natural resource that is
scarce and requires protection.671
347. The Panel first addressed the question of wh ether China's export quota relates to the
conservation of refractory-grade bauxite. Based on its review of the evidence and arguments before

667China's appellant's submission, para. 373 (quoting Panel Reports, para. 7.297). (emphasis added by
China)
668Panel Reports, para. 7.297. (emphasis added)
669Panel Reports, para. 7.355. China also refers to paragraphs 7.257, 7.258, 7.297-7.302, 7.305, 7.306,
7.346, 7.349, 7.351, and 7.354 of the Panel Reports. (See China's appellant's submission, paras. 299 and 388)
670Panel Reports, para. 7.397.
671See Panel Reports, para. 7.356.

it, the Panel found this not to be the case.
672 The Panel nevertheless conti nued its analysis in order to
determine whether the export quota on refractory-gr ade bauxite was "made effective in conjunction
with" restrictions on domestic production or consumption, as requi red under Article XX(g) of the
GATT 1994.
348. The Panel considered that, in order for a me asure to be justified under Article XX(g), the
measure must satisfy two conditions: (i) it must rela te to the conservation of an exhaustible natural
resource; and (ii) it must be made effective in conjunction with restrictions on domestic production or
consumption. With respect to the first requireme nt, the Panel stated that the words "relate to …
conservation" have been interpreted by the Appe llate Body to require a substantial relationship
between the trade measure and conservation, so that the trade measure would be "primarily aimed at"
the conservation of exhaustible natural resources. 673 The Panel further noted that the term
"conservation" is defined as "the act of preserving a nd maintaining the existing state of something, in
this case 'natural resources' covered by Article XX(g)."674
349. With respect to the requirement that conserva tion measures in the sense of Article XX(g) be
"made effective in conjunction with" restrictions on domestic production, th e Panel referred to a
statement of the GATT panel in Canada – Herring and Salmon , that a measure can only be
considered to be "made effective in conjunction with" restrictions on domestic production, if it is
"primarily aimed at rendering effective these restrictions". 675 The Panel also quoted the
Appellate Body's statement in US – Gasoline that the phrase "'if such measures are made effective in
conjunction with restrictions on domestic products or consumption' is appropriately read as a
requirement that the measures concerned impose r estrictions, not just in respect of imported
[products], but also with respect to domestic [products]."676 The Panel then found that "restrictions on
domestic production or consumpti on must not only be applied jointly with the challenged export
restrictions but, in addition, the purpose of those export restrictions must be to ensure the
effectiveness of those domestic restrictions."
677

672Panel Reports, para. 7.435.
673Panel Reports, para. 7.370 (quoting Appellate Body Report, US – Gasoline , p. 18, DSR 1996:I, 3,
at 17).
674Panel Reports, para. 7.372.
675Panel Reports, para. 7.395 (quoting GATT Panel Report, Canada – Herring and Salmon , para. 4.6).
(emphasis added by the Panel omitted)
676Panel Reports, para. 7.396 (quoting Appellate Body Report, US – Gasoline , p. 20, DSR 1996:I, 3,
at 19).
677Panel Reports, para. 7.397 (referring to GATT Panel Report, Canada – Herring and Salmon ,
para. 4.6).

350. China alleges that the Panel erred in its in terpretation of the phrase "made effective in
conjunction with" in Article XX(g) of the GATT 1994 . China maintains that the Panel read this
phrase to mean that, in order to be justified under Article XX(g), a challenged measure must satisfy
two cumulative conditions: first, it must "be app lied jointly" with restrictions on domestic production
or consumption; and, second, the "purpose" of th e challenged measure must be to make effective
restrictions on domestic production or consumption. China argues that the first element of this
interpretation is consistent with the ordinary meaning of the phrase "made effective in conjunction
with", but that the second is not. China requests th e Appellate Body to reverse the erroneous second
element of the Panel's interpretation.
678 China does not, however, appeal the Panel's ultimate
conclusion that China's export quota on refractory-grade bauxite is inconsistent with Article XI of the
GATT 1994 and not justified under Article XX(g).679
351. China submits that the Appellate Body's interp retation of the term "i n conjunction with" in
US – Gasoline corresponds to the first element of the meaning that the Panel attributed to that term,
namely, that the challenged measures "be applied jo intly with" restrictions on domestic production or
consumption.680 China submits, however, that nothing in the phrase "made effective in conjunction
with" suggests that the "purpose" of a challenged me asure must be to ensure the effectiveness of
domestic restrictions.681 In particular, China argues that Artic le XX(g) does not require that each set
of measures must have, as a separate and independe nt purpose, the goal of ensuring the effectiveness
of the other set of measures. For China, it suffi ces that the challenged measure is related to the
conservation of a natural resource, and that it ope rates together with domestic restrictions on the
production or consumption of the same resource.682
352. By contrast, the United States and Mexico requ est the Appellate Body to uphold the Panel's
reasoning. They submit that US – Gasoline did not involve the particular interpretive question of how
the operation of the challenged measure should be conjoined with the operation of domestic
restrictions, and that the present case was the first instance since the GATT panel proceeding in
Canada – Herring and Salmon that a respondent asserted Article XX(g) as a defence where the
challenged measure was distinct from the rest rictions on domestic pr oduction or consumption. 683
Therefore, the United States and Mexico argue that the Panel appropriately drew upon the Canada –

680China's appellant's submission, paras. 405 and 406.
683The United States and Mexico further submit that the Appellate Body report in US – Shrimp also did
not involve this question. (Joint appellees' submission of the United States and Mexico, para. 215)

Herring and Salmon panel's reasoning.
684 The European Union also supports the Panel's reasoning,
arguing that the GATT panel rightly stated that a measure can only be made effective "in conjunction
with" domestic restrictions on production if it is primarily aimed at rendering effective these
restrictions.
B. Analysis
353. Article XX of the GATT 1994 provides, in relevant part:
General Exceptions
Subject to the requirement that such measures are not applied in a
manner which would constitute a mean s of arbitrary or unjustifiable
discrimination between countries wher e the same conditions prevail,
or a disguised restriction on international trade, nothing in this
Agreement shall be construed to pr event the adoption or enforcement
by any contracting party of measures:
…
(g) relating to the conservation of exhaustible natural resources
if such measures are made effective in conjunction with restrictions
on domestic production or consumption[.]
354. Article XX of the GATT 1994 contemplates a two-tiered analysis of a measure that a Member
seeks to justify under that provision.
685 A respondent must first demonstrate that the challenged
measure falls within the scope of one of the subpara graphs of Article XX. Where this is the case, a
respondent must further establish that the measure at issue satisfies the requirements of the chapeau of
Article XX.
355. In order to fall within the ambit of subparagraph (g) of Article XX, a measure must "relat[e]
to the conservation of exhaustible natural resources" . The term "relat[e] to" is defined as "hav[ing]
some connection with, be[ing] connected to". 686 The Appellate Body has found that, for a measure to
relate to conservation in the sense of Article XX(g), there must be "a close and genuine relationship of

684Joint appellees' submission of the United States and Mexico, para. 220.
685Appellate Body Report, US – Shrimp , paras. 118, 119, and 147. See also Appellate Body Report,
US – Gasoline, p. 22, DSR 1996:I, 3, at 20; and Appellate Body Report, US – Gambling, para. 292.
686Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 2, p. 2519.

ends and means".
687 The word "conservation", in turn, means "the preservation of the environment,
especially of natural resources".688
356. Article XX(g) further requires that conservati on measures be "made effective in conjunction
with restrictions on domestic production or consump tion". The word "effective" as relating to a legal
instrument is defined as "in operation at a given time". 689 We consider that the term "made effective",
when used in connection with a legal instrument , describes measures brought into operation, adopted,
or applied. The Spanish and French e quivalents of "made effective"—namely " se apliquen" and
"sont appliquées"—confirm this understanding of "made effect ive". The term "in conjunction" is
defined as "together, jointly, (with)". 690 Accordingly, the trade restriction must operate jointly with
the restrictions on domestic production or consumpti on. Article XX(g) thus permits trade measures
relating to the conservation of ex haustible natural resources when su ch trade measures work together
with restrictions on domestic production or cons umption, which operate so as to conserve an
exhaustible natural resource. By its terms, Artic le XX(g) does not contain an additional requirement
that the conservation measure be primarily aimed at making effective the restrictions on domestic
production or consumption.
357. The Appellate Body addressed Article XX(g) in US – Gasoline.691 The Appellate Body noted
Venezuela's and Brazil's argument that, to be d eemed as "made effective in conjunction with
restrictions on domestic production or consumption", a measure must be "primarily aimed at" both
conservation of exhaustible natu ral resources and making effective certain restrictions on domestic
production or consumption. The Appellate Body, however, found that:
… "made effective" when used in connection with a measure—a
governmental act or regulation—may be seen to refer to such
measure being "operative", as "in force", or as having "come into
effect." Similarly, the phrase "in conjunction with" may be read
quite plainly as "together with" or "jointly with." Taken together, the
second clause of Article XX(g) appears to us to refer to governmental
measures like the baseline establishment rules being promulgated or
brought into effect together with restrictions on domestic production
or consumption of natural resources. Put in a slightly different
manner, we believe that the clause "if such measures are made

688Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 1, p. 496.
689Black's Law Dictionary, 9th edn, B.A. Garner (ed.) (West Group, 2009), p. 592.
690Shorter Oxford English Dictionary , 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University
Press, 2007), Vol. 1, p. 492.
691Appellate Body Report, US – Gasoline, pp. 19-22, DSR 1996:I, 3, at 18-20.

effective in conjunction with rest rictions on domestic production or
consumption" is appropriately r ead as a requirement that the
measures concerned impose restrictions, not just in respect of
imported gasoline but also with r espect to domestic gasoline. The
clause is a requirement of even-handedness in the imposition of
restrictions, in the name of c onservation, upon the production or
consumption of exhaustible natural resources.
692
358. Accordingly, in assessing whether the base line establishment rules at issue in US – Gasoline
were "made effective in conjunction with" restri ctions on domestic productio n or consumption, the
Appellate Body relied on the fact that those rules were promulgated or brought into effect "together
with" restrictions on domestic production or consum ption of natural resources. However, even
though Brazil and Venezuela had presented argumen ts suggesting that it was necessary that the
purpose of the baseline establishment rules be to en sure the effectiveness of restrictions on domestic
production, the Appellate Body did not consider this to be necessary. In particular, the
Appellate Body did not consider that, in order to be justified under Article XX(g), measures "relating
to the conservation of exhaustible natural resource s" must be primarily aimed at rendering effective
restrictions on domestic production or consumption. Instead, the Appellate Body read the terms "in
conjunction with", "quite plainly", as "together with" or "jointly with" 693, and found no additional
requirement that the conservation measure be primar ily aimed at making effective certain restrictions
on domestic production or consumption.
359. As noted above, the Panel in the present case appe ars to have considered that, in order to
prove that a measure is "made effective in conjunc tion with" restrictions on domestic production or
consumption in the sense of Article XX(g), it must be established, first, that the measure is applied
jointly with restrictions on domestic production or consumption, and, second, that the purpose of the
challenged measure is to make effective restric tions on domestic production or consumption. In
particular, the Panel's use of the words "not only … but, in addition", as well as the reference at the
end of the sentence to the GATT panel report in Canada – Herring and Salmon , indicate that the
Panel did in fact consider that two separate conditions have to be met for a measure to be considered
"made effective in conjunction with" in the sense of Article XX(g).
360. As explained above, we see nothing in the text of Article XX(g) to suggest that, in addition to
being "made effective in conjunction with restri ctions on domestic produc tion or consumption", a
trade restriction must be aimed at ensuring the effectiveness of domestic restrictions, as the Panel

692Appellate Body Report, US – Gasoline, p. 20, DSR 1996:I, 3, at 19.
693Appellate Body Report, US – Gasoline, p. 20, DSR 1996:I, 3, at 19.

found. Instead, we have found above that Article XX(g) permits trade measures relating to the
conservation of exhaustible natural resources if such trade measures work together with restrictions on
domestic production or consumption, which operate so as to conserve an exhaustible natural resource.
361. Based on the foregoing, we find that the Panel erred in interpreting the phrase "made effective
in conjunction with" in Article XX(g) of the GAT T 1994 to require a separate showing that the
purpose of the challenged measure must be to make effective restrictions on domestic production or
consumption. Accordingly, we reverse this interpretation by the Panel in paragraph 7.397 of the
Panel Reports.

 Page US-145

IX. Findings and Conclusions in the Appellate Body Report WT/DS394/AB/R
362. In the appeal of the Panel Report in (complaint by the United States, WT/DS394/R) (the "US Panel Report"), for the
reasons set out in this Report, the Appellate Body:
(a) finds that the Panel erred under Article 6.2 of the DSU in making findings regarding
claims allegedly identified in Section III of the United States' panel request; and
therefore declares moot and of no legal effect the Panel findings in
paragraph 8.4(a)-(d) in respect of claims concerning export quota administration and
allocation; in paragraph 8.5(a)-(b) in r espect of claims concerning export licensing
requirements; in paragraph 8.6(a)-(b) in respect of claims concerning a minimum
export price requirement; and in paragraph 8.4(e) of the US Panel Report in respect
of claims concerning fees and formalities in connection with exportation.
(b) finds that the Panel did not err in recomme nding, in paragraph 8.8 of the US Panel
Report, that China bring its measures into conformity with its WTO obligations such
that the "series of measures" do not operate to bring about a WTO-inconsistent result;
(c) finds that the Panel did not err, in paragr aph 7.159 of the US Panel Report, in finding
that there is no basis in China's Accessi on Protocol to allow the application of
Article XX of the GATT 1994 to China's ob ligations in Paragraph 11.3 of China's
Accession Protocol; and therefore upholds the Panel's conclusion, in
paragraph 8.2(b) of the US Panel Report, that China may not seek to justify the
application of export duties to certain forms of fluorspar pursuant to Article XX(g) of
the GATT 1994 and the Panel's conclusion, in paragraph 8.2(c) of the US Panel
Report, that China may not seek to justify th e application of export duties to certain
forms of magnesium, manganese and zinc pursuant to Article XX(b) of the
GATT 1994;
(d) with respect to Article XI:2(a) of the GATT 1994:
(i) upholds the Panel's conclusion, in para graph 7.355 of the US Panel Report,
that China had not demonstrated th at its export quota on refractory-grade
bauxite was "temporarily applied", within the meaning of Article XI:2(a) of
the GATT 1994, to either prevent or relieve a "critical shortage";

 Page EU-145

IX. Findings and Conclusions in the Appellate Body Report WT/DS395/AB/R
362. In the appeal of the Panel Report in (complaint by the European Union, WT/DS395/R) (the "EU Panel Report"), for the
reasons set out in this Report, the Appellate Body:
(a) finds that the Panel erred under Article 6.2 of the DSU in making findings regarding
claims allegedly identified in Section III of the European Union's panel request; and
therefore declares moot and of no legal effect the Panel findings in
paragraph 8.11(a)-(e) in respect of claims concerning export quota administration and
allocation; in paragraph 8.12(a)-(b) in r espect of claims concerning export licensing
requirements; and in paragraph 8.13(a)-(b ) of the EU Panel Report in respect of
claims concerning a minimum export price requirement;
(b) finds that the Panel did not err in recomme nding, in paragraph 8.15 of the EU Panel
Report, that China bring its measures into conformity with its WTO obligations such
that the "series of measures" do not operate to bring about a WTO-inconsistent result;
(c) finds that the Panel did not err, in paragra ph 7.159 of the EU Panel Report, in finding
that there is no basis in China's Accessi on Protocol to allow the application of
Article XX of the GATT 1994 to China's ob ligations in Paragraph 11.3 of China's
Accession Protocol; and therefore upholds the Panel's conclusion, in
paragraph 8.9(b) of the EU Panel Report , that China may not seek to justify the
application of export duties to certain forms of fluorspar pursuant to Article XX(g) of
the GATT 1994 and the Panel's conclusion, in paragraph 8.9(c) of the EU Panel
Report, that China may not seek to justify th e application of export duties to certain
forms of magnesium, manganese and zinc pursuant to Article XX(b) of the
GATT 1994;
(d) with respect to Article XI:2(a) of the GATT 1994:
(i) upholds the Panel's conclusion, in para graph 7.355 of the EU Panel Report,
that China had not demonstrated th at its export quota on refractory-grade
bauxite was "temporarily applied", within the meaning of Article XI:2(a) of
the GATT 1994, to either prevent or relieve a "critical shortage";

 Page MEX-145

IX. Findings and Conclusions in the Appellate Body Report WT/DS398/AB/R
362. In the appeal of the Panel Report in (complaint by Mexico, WT/DS398/R) (the "Mexico Panel Report"), for the reasons set
out in this Report, the Appellate Body:
(a) finds that the Panel erred under Article 6.2 of the DSU in making findings regarding
claims allegedly identified in Section III of Mexico's panel request; and therefore
declares moot and of no legal effect the Panel findings in paragraph 8.18(a)-(d) in
respect of claims concerning export quota administration and allocation; in
paragraph 8.19(a)-(b) in respect of claims concerning export licensing requirements;
in paragraph 8.20(a)-(b) in respect of claims concerning a minimum export price
requirement; and in paragraph 8.18(e) of the Mexico Panel Report in respect of
claims concerning fees and formalities in connection with exportation;
(b) finds that the Panel did not err in reco mmending, in paragraph 8.22 of the Mexico
Panel Report, that China bring its measures into conformity with its WTO obligations
such that the "series of measures" do not operate to bring about a WTO-inconsistent
result;
(c) finds that the Panel did not err, in paragr aph 7.159 of the Mexico Panel Report, in
finding that there is no basis in China's Acce ssion Protocol to allow the application of
Article XX of the GATT 1994 to China's ob ligations in Paragraph 11.3 of China's
Accession Protocol; and therefore upholds the Panel's conclusion, in paragraph
8.16(b) of the Mexico Panel Report, that China may not seek to justify the application
of export duties to certain forms of fluorspar pursuant to Article XX(g) of the GATT
1994 and the Panel's conclusion, in paragr aph 8.16(c) of the Mexico Panel Report,
that China may not seek to justify the appli cation of export duties to certain forms of
magnesium, manganese and zinc pursuant to Article XX(b) of the GATT 1994;
(d) with respect to Article XI:2(a) of the GATT 1994:
(i) upholds the Panel's conclusion, in pa ragraph 7.355 of the Mexico Panel
Report, that China had not demonstrated that its export quota on refractory-
grade bauxite was "temporarily applied", within the meaning of
Article XI:2(a) of the GATT 1994, to either prevent or relieve a "critical
shortage";

ANNEX I

9 November 2009

 (09-5564)
 Original: English

Request for the Establishment of a Panel by the United States

 The following communication, dated 4 Novemb er 2009, from the delegation of the United
States to the Chairman of the Dispute Settlement Bo dy, is circulated pursuant to Article 6.2 of the
DSU.

 On 23 June 2009, the United States requested consultations with the Government of the
People's Republic of China ("China") pursuant to Articles 1 and 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU") and Article XXII of the General
Agreement on Tariffs and Trade 1994 ("GATT 1994") with respect to China's restraints on the
exportation from China of various forms of bauxite
1, coke 2, fluorspar 3, magnesium 4, manganese 5,

1 Bauxite includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes, as listed in Attachment 1 of Notice "2009 Ex port Licensing Management Commodities List" (Ministry
of Commerce and General Administration of Customs, Notice (2008) No. 100, January 1, 2009) ("2009 Export
Licensing List") and/or the following eight-digit HS numbers as listed in Table 7 of Notice Regarding the 2009
Tariff Implementation Program (State Council Tariff Policy Commission, shuiweihui (2008) No. 40, January 1,
2009) ("2009 Export Duty List"): 2508300000/25083000, 2606000000/26060000, 26204000.
2 Coke includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the 2009 Export
Duty List: 2704001000/27040010.
3 Fluorspar includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 2529210000/25292100, 2529220000/25292200.
4 Magnesium includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 81041100, 81041900, 81042000.
5 Manganese includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 26020000, 8111001010/81110010, 8111001090/81110010.

silicon carbide
6, silicon metal 7, yellow phosphorus 8, and zinc 9 (the "materials"). The United States
held consultations with China on 31 July 2009, and 1-2 September 2009. Those consultations
unfortunately did not resolve the dispute.

I. Export Quotas

 China subjects the exportation of bauxite, c oke, fluorspar, silicon carbide, and zinc to
quantitative restrictions such as quotas.

 The United States understands that these Chinese measures are reflected in, among others:

 Foreign Trade Law of the People's Republic of China (adopted at the 8
th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures for the Administration of E xport Commodities Quotas (Order of the
Ministry of Foreign Trade and Economic Cooperation No. 12, adopted on December
20, 2001, January 1, 2002)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Measures for the Administration of the Organs for Issuing the Licenses of Import and
Export Commodities (Ministry of Fore ign Trade and Econom ic Cooperation,
waijingmaopeiguanhanzi (1999) No. 68, September 21, 1999)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

6 Silicon carbide includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 2849200000, 3824909910.
7 Silicon metal includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 28046900.
8 Yellow phosphorus includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 28047010.
9 Zinc includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the 2009 Export
Duty List: 2608000001/26080000, 2608000090/26080000, 790111111000/790111100, 7901119000/79011190,
7901120000/79011200, 7901200000/79012000, 79020000, 26201100, 26201900.

 Working Rules on Issuing Export Licenses (Ministry of Commerce, shangpeifa
(2008) No. 398, October 9, 2008)

 Rules on the Administration of Import and Export License Certificates (Ministry of
Foreign Trade and Economic Cooperati on, waijingmaopeizi (1999) No. 87,
December 6, 1999)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice Regarding Passing Down the 2009 First Batch Regular Trade Coke Export
Quota (Ministry of Commerce, shangmaohan (2008) No. 140, January 1, 2009)

 2009 Coke Export Quota Declaration Cond itions and Declaration Procedures
(Ministry of Commerce, Notice (2008) No. 76, October 13, 2008)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100,
January 1, 2009)

 Announcement of the Ministry of Commer ce Issuing the "2009 Graded License-
Issuing List of Commodities Subject to Export License Administration" (Ministry of
Commerce, Notice (2008) No. 124, January 1, 2009)

 Announcement Regarding Printing "Working Rules on Issuing Export Licenses"
(Ministry of Commerce, shangpeifa (2008) No. 398, October 9, 2008)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Passing Down the 2009 Second Batch Regular Trade Coke and
Rare Earth Export Quota (Ministry of Commerce, shangzihan (2009) No. 73,
September 8, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88, October 29,
2009)

 as well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 The United States considers that these measures are inconsistent with Article XI:1 of the
GATT 1994 as well as China's obligations under the provi sions of paragraph 1.2 of Part I of the
Protocol on the Accession of the People's Republic of China (WT/L/432) ("Accession Protocol"),
which incorporates commitments in paragraphs 162 and 165 of the Working Party Report on the
Accession of China (WT/MIN(01)/3) ("Working Party Report").

II. Export Duties

 China subjects the materials to export duties.

 China imposes export duty rates, "temporary" expo rt duty rates, and/or "special" export duty
rates of various magnitudes on bauxite, coke, fluorspar, magnesium, manganese, silicon metal, yellow
phosphorus, and zinc. These export duties are imposed either on materials that are not listed in Annex
6 of the Accession Protocol, or on materials that are listed in Annex 6 of the Accession Protocol, but
at rates that exceed the maximum rates designated in Annex 6.

 In addition, as discussed in Sec tion III below, China allocates the quotas
10 imposed on the
exportation of bauxite, fluorspar, and silicon carbide through a bidding system. In connection with
the administration of this bidding system, China requires enterprises to pay a charge in order to export
these materials. However, bauxite, fluorspar, a nd silicon carbide are not listed in Annex 6 of the
Accession Protocol.

 The United States understands that these Chinese measures are reflected in, among others:

 Customs Law of the People's Republic of China (adopted at the 19
th Meeting of the
Standing Committee of the Sixth Nationa l People's Congress on January 22, 1987,
amended July 8, 2000)

10 Discussed in Section I above.

 Regulations of the People's Republic of Ch ina 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 October 29, 2003, January 1, 2004)

 Notice Regarding the 2009 Tariff Implemen tation Program (State Council Tariff
Policy Commission, shuiweihui (2008) No. 40, January 1, 2009)

 Foreign Trade Law of the People's Republic of China (adopted at the 8 th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100,
January 1, 2009)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88, October 29,
2009)

 as well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 The United States considers that these measures are inconsistent with paragraph 11.3 of Part I
of the Accession Protocol, as well as China's obligations under the pr ovisions of paragraph 1.2 of
Part I of the Accession Protocol, which incorporates commitments referred to in paragraph 342 of the
Working Party Report.

III. Additional Restraints Imposed on Exportation

 In addition to the export quotas and export du ties discussed in Sections I and II above, China
imposes other restraints on the exportation of the mate rials, administers its measures in a manner that
is not uniform, impartial, and reasonable, impo ses excessive fees and formalities on exportation, and
does not publish certain measures pertaining to requirements, restrictions, or prohibitions on exports.

 China administers the export quotas imposed on bauxite, coke, fluorspar, silicon carbide, and
zinc discussed in Section I above, through its mi nistries and other organizations under the State
Council as well as chambers of commerce and industry associations, in a manner that restricts exports
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 individuals to export.

 China allocates the export quotas imposed on bauxite, fluorspar, and silicon carbide discussed
in Section I above, through a bidding system. Chin a administers the requirements and procedures for
this bidding system through its ministries and ot her organizations under the State Council as well as
chambers of commerce and industry associations, in a manner that restricts exports and is not
uniform, impartial and reasonable. In connection with the administration of this bidding system,
China also requires foreign-invest ed enterprises to satisfy certain criteria in order to export these
materials that Chinese enterprises need not satisfy. Further, China requires enterprises to pay a charge
in order to export these materials that is excessive and imposes excessive formalities on the
exportation of these materials.

 China does not publish the amount for the ex port quota for zinc or any conditions or
procedures for applying entities to qualify to export zinc.

 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, fluor spar, silicon carbide, and zinc in connection with
the administration of the export quotas discussed in Section I, as an additional restraint on the
exportation of those materials.

 China also imposes quantitative r estrictions on the exportation of the materials by requiring
that prices for the materials meet or exceed a mini mum price before they may be exported. Further,
through its ministries and other organizations un der the State Council as well as chambers of
commerce and industry associations, China admini sters the price requirements in a manner that
restricts exports and is not uniform, impartial, a nd reasonable. China also does not publish certain
measures relating to these requirements in a manner that enables governments and traders to become
acquainted with them.

 The United States understands that these Chinese measures are reflected in, among others:

 Foreign Trade Law of the People's Republic of China (adopted at the 8
th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures for the Administration of E xport Commodities Quotas (Order of the
Ministry of Foreign Trade and Economic Cooperation No. 12, adopted on December
20, 2001, January 1, 2002)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Measures for the Administration of the Organs for Issuing the Licenses of Import and
Export Commodities (Ministry of Fore ign Trade and Econom ic Cooperation,
waijingmaopeiguanhanzi (1999) No. 68, September 21, 1999)

 Working Rules on Issuing Export Licenses (Ministry of Commerce, shangpeifa
(2008) No. 398, October 9, 2008)

 Rules on the Administration of Import and Export License Certificates (Ministry of
Foreign Trade and Economic Cooperati on, waijingmaopeizi (1999) No. 87,
December 6, 1999)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice Regarding Passing Down the 2009 First Batch Regular Trade Coke Export
Quota (Ministry of Commerce, shangmaohan (2008) No. 140, January 1, 2009)

 2009 Coke Export Quota Declaration Cond itions and Declaration Procedures
(Ministry of Commerce, Notice (2008) No. 76, October 13, 2008)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100, January
1, 2009)

 Announcement of the Ministry of Commer ce Issuing the "2009 Graded License-
Issuing List of Commodities Subject to Export License Administration" (Ministry of
Commerce, Notice (2008) No. 124, January 1, 2009)

 Announcement Regarding Printing "Working Rules on Issuing Export Licenses"
(Ministry of Commerce, shangpeifa (2008) No. 398, October 9, 2008)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
Bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Passing Down the 2009 Second Batch Regular Trade Coke and
Rare Earth Export Quota (Ministry of Commerce, ShangZiHan (2009) No. 73,
September 8, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88, October 29,
2009)

 Charter of the China Chamber of Commerc e of Metals, Minera ls and Chemicals
Importers and Exporters

 Charter of the China Coking Industry Association

 Measures for the Administration over Foreign Trade and Economic Social
Organizations (Ministry of Foreign Trade and Economic Coopera tion, February 26,
1991)

 Notice Regarding Printing and Distributi on of Several Regulations for Personnel
Management of Chambers of Commerce fo r Importers and Exporters (Ministry of
Foreign Trade and Economic Cooperation, September 23, 1994)

 Interim Regulations of the Ministry of Foreign Trade and Ec onomic Cooperation on
Punishment for Conduct at Exporting at Lower-than-Normal Price (Ministry of
Foreign Trade and Economic Cooperation, March 20, 1996)

 Notice Regarding Rules for Contract Declaration for Chemicals-Related Verification
and Stamp Products (China Chamber of Commerce of Metals, Minerals and
Chemicals Importers and E xporters Petroleum and Chem icals Products Department,
December 30, 2003)

 Online Verification and Certification Oper ating Steps (China Chamber of Commerce
of Metals, Minerals and Chemicals Importers and Exporters)

 Rules for Coordination with Respect to Cu stoms Price Review of Export Products,
(Ministry of Foreign Trade and Economic Cooperation guanzonghanzi No. 21, 1997)

 Notice of the Rules on Price Reviews of Export Products by the Customs, (Ministry
of Foreign Trade and Economic Cooperation guanzonghanzi No. 21, 1997)

 Notice on the Issuance of "Various Provisions on the Strengthening of Export Product
Coordination and Management" (Ministry of Foreign Economic Relations and Trade,
jinchufa (1991) No. 52, February 22, 1991)

 "Various Provisions on the Strengtheni ng of Export Product Coordination and
Management" (Ministry of Foreign Economic Relations and Trade, jinchufa (1991)
No. 52, February 22, 1991)

 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)

 as well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 The United States considers that these measures are inconsistent with Article VIII:1(a) and
VIII:4, Article X:1 and X:3(a), and Article XI:1 of the GATT 1994 and paragraphs 2(A)2, 5.1, 5.2 and
8.2 of Part I of the Accession Protocol, as well as China's obligations under the provisions of
paragraph 1.2 of Part I of the Accession Protocol, which incorporates commitments in paragraphs 83,
84, 162, and 165 of the Working Party Report.

 Accordingly, the United States respectfully requ ests that, pursuant to Article 6 of the DSU,
the Dispute Settlement Body establish a panel to ex amine this matter, with the standard terms of
reference as set out in Article 7.1 of the DSU.

ANNEX II

9 November 2009

 (09-5567)
 Original: English

Request for the Establishment of a Panel by the European Communities

 The following communication, dated 4 November 2009, from the delegation of the European
Communities to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of
the DSU.

 On 23 June 2009, the European Communities requ ested consultations with the Government of
the People's Republic of China ("China" ) pursuant to Articles 1 and 4 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU") and Article XXII of the General
Agreement on Tariffs and Trade 1994 ("GATT 1994") with respect to China's restraints on the
exportation from China of various forms of bauxite
1, coke 2, fluorspar 3, magnesium 4, manganese 5,

1 Bauxite includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes, as listed in Attachment 1 of Notice "2009 Ex port Licensing Management Commodities List" (Ministry
of Commerce and General Administration of Customs, Notice (2008) No. 100, January 1, 2009) ("2009 Export
Licensing List") and/or the following eight-digit HS numbers as listed in Table 7 of Notice Regarding the 2009
Tariff Implementation Program (State Council Tariff Policy Commission, shuiweihui (2008) No. 40, January 1,
2009) ("2009 Export Duty List"): 2508300000/25083000, 2606000000/26060000, 26204000.
2 Coke includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the 2009 Export
Duty List: 2704001000/27040010.
3 Fluorspar includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 2529210000/25292100, 2529220000/25292200.
4 Magnesium includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 81041100, 81041900, 81042000.
5 Manganese includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 26020000, 8111001010/81110010, 8111001090/81110010.

silicon carbide
6, silicon metal 7, yellow phosphorus 8, and zinc 9 (the "materials"). The European
Communities held consultations with China on Ju ly 31, 2009, and Septem ber 1-2, 2009. Those
consultations unfortunately did not resolve the dispute.

I. Export Quotas

 China subjects the exportation of bauxite, c oke, fluorspar, silicon carbide, and zinc to
quantitative restrictions such as quotas.

 The European Communities understands that these Chinese measures are reflected in, among
others:

 Foreign Trade Law of the People's Republic of China (adopted at the 8
th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures for the Administration of E xport Commodities Quotas (Order of the
Ministry of Foreign Trade and Economic Cooperation No. 12, adopted on December
20, 2001, January 1, 2002)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Measures for the Administration of the Organs for Issuing the Licenses of Import and
Export Commodities (Ministry of Fore ign Trade and Econom ic Cooperation,
waijingmaopeiguanhanzi (1999) No. 68, September 21, 1999)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

6 Silicon carbide includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 2849200000, 3824909910.
7 Silicon metal includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 28046900.
8 Yellow phosphorus includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 28047010.
9 Zinc includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the 2009 Export
Duty List: 2608000001/26080000, 2608000090/26080000, 790111111000/790111100, 7901119000/79011190,
7901120000/79011200, 7901200000/79012000, 79020000, 26201100, 26201900.

 Working Rules on Issuing Export Licenses (Ministry of Commerce, shangpeifa
(2008) No. 398, October 9, 2008)

 Rules on the Administration of Import and Export License Certificates (Ministry of
Foreign Trade and Economic Cooperati on, waijingmaopeizi (1999) No. 87,
December 6, 1999)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice Regarding Passing Down the 2009 First Batch Regular Trade Coke Export
Quota (Ministry of Commerce, shangmaohan (2008) No. 140, January 1, 2009)

 2009 Coke Export Quota Declaration Cond itions and Declaration Procedures
(Ministry of Commerce, Notice (2008) No. 76, October 13, 2008)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100, January
1, 2009)

 Announcement of the Ministry of Commer ce Issuing the "2009 Graded License-
Issuing List of Commodities Subject to Export License Administration" (Ministry of
Commerce, Notice (2008) No. 124, January 1, 2009)

 Announcement Regarding Printing "Working Rules on Issuing Export Licenses"
(Ministry of Commerce, shangpeifa (2008) No. 398, October 9, 2008)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Passing Down the 2009 Second Batch Regular Trade Coke and
Rare Earth Export Quota (Ministry of Commerce, shangzihan (2009) No. 73,
September 8, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88, October 29,
2009)

 as well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 The European Communities considers that these measures are inconsistent with Article XI:1
of the GATT 1994 as well as China's obligations under th e provisions of paragraph 1.2 of Part I of the
Protocol on the Accession of the People's Republic of China (WT/L/432) ("Accession Protocol"),
which incorporates commitments in paragraphs 162 and 165 of the Working Party Report on the
Accession of China (WT/MIN(01)/3) ("Working Party Report").

II. Export Duties

 China subjects the materials to export duties.

 China imposes export duty rates, "temporary" expo rt duty rates, and/or "special" export duty
rates of various magnitudes on bauxite, coke, fluorspar, magnesium, manganese, silicon metal, yellow
phosphorus, and zinc. These export duties are imposed either on materials that are not listed in Annex
6 of the Accession Protocol, or on materials that are listed in Annex 6 of the Accession Protocol, but
at rates that exceed the maximum rates designated in Annex 6.

 In addition, China allocates the quotas
10 imposed on the exportation of bauxite, fluorspar, and
silicon carbide through a bidding system. In conn ection with the administration of this bidding
system, China requires enterprises to pay a charge in order to export these materials. However,
bauxite, fluorspar, and silicon carbide are not listed in Annex 6 of the Accession Protocol.

 The European Communities understands that these Chinese measures are reflected in, among
others:

 Customs Law of the People's Republic of China (adopted at the 19
th Meeting of the
Standing Committee of the Sixth Nationa l People's Congress on January 22, 1987,
amended July 8, 2000)

10 Discussed in Section I above.

 Regulations of the People's Republic of Ch ina 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 October 29, 2003, January 1, 2004)

 Notice Regarding the 2009 Tariff Implemen tation Program (State Council Tariff
Policy Commission, shuiweihui (2008) No. 40, January 1, 2009)

 Foreign Trade Law of the People's Republic of China (adopted at the 8 th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100, January
1, 2009)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88, October 29,
2009)

 as well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 The European Communities considers that these measures are inconsistent with
paragraph 11.3 of Part I of the Accession Protoc ol, as well as China's obligations under the provisions
of paragraph 1.2 of Part I of the Accession Protoc ol, which incorporates commitments referred to in
paragraph 342 of the Working Party Report.

III. Additional Restraints Imposed on Exportation

 In addition to the export quotas and export du ties discussed in Sections I and II above, China
imposes other restraints on the exportation of the mate rials, administers its measures in a manner that
is not uniform, impartial, and reasonable, impo ses excessive fees and formalities on exportation, and
does not publish certain measures pertaining to requirements, restrictions, or prohibitions on exports.

 China administers the export quotas imposed on bauxite, coke, fluorspar, silicon carbide, and
zinc discussed in Section I above, through its mi nistries and other organisations under the State
Council as well as chambers of commerce and industry associations, in a manner that restricts exports
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 individuals to export.

 China allocates the export quotas imposed on bauxite, fluorspar, and silicon carbide discussed
in Section I above, through a bidding system. Chin a administers the requirements and procedures for
this bidding system through its ministries and othe r organisations under the State Council as well as
chambers of commerce and industry associations, in a manner that restricts exports and is not
uniform, impartial and reasonable. In connection with the administration of this bidding system,
China also requires foreign-invest ed enterprises to satisfy certain criteria in order to export these
materials that Chinese enterprises need not satisfy.

 China does not publish the amount for the ex port quota for zinc or any conditions or
procedures for applying entities to qualify to export zinc.

 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 discussed in Section I, as an additional restraint on the
exportation of those materials.

 China also imposes quantitative r estrictions on the exportation of the materials by requiring
that prices for the materials meet or exceed a mini mum price before they may be exported. Further,
through its ministries and other organisations under the State Council as well as chambers of
commerce and industry associations, China admini sters the price requirements in a manner that
restricts exports and is not uniform, impartial, a nd reasonable. China also does not publish certain
measures relating to these requirements in a manner that enables governments and traders to become
acquainted with them.

 China also imposes excessive fees and formalities in relation to the exportation of the
materials.

 The European Communities understands that these Chinese measures are reflected in, among
others:

 Foreign Trade Law of the People's Republic of China (adopted at the 8
th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures for the Administration of E xport Commodities Quotas (Order of the
Ministry of Foreign Trade and Economic Cooperation No. 12, adopted on
December 20, 2001, January 1, 2002)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Measures for the Administration of the Organs for Issuing the Licenses of Import and
Export Commodities (Ministry of Fore ign Trade and Econom ic Cooperation,
waijingmaopeiguanhanzi (1999) No. 68, September 21, 1999)

 Working Rules on Issuing Export Licenses (Ministry of Commerce, shangpeifa
(2008) No. 398, October 9, 2008)

 Rules on the Administration of Import and Export License Certificates (Ministry of
Foreign Trade and Economic Cooperati on, waijingmaopeizi (1999) No. 87,
December 6, 1999)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice Regarding Passing Down the 2009 First Batch Regular Trade Coke Export
Quota (Ministry of Commerce, shangmaohan (2008) No. 140, January 1, 2009)

 2009 Coke Export Quota Declaration Cond itions and Declaration Procedures
(Ministry of Commerce, Notice (2008) No. 76, October 13, 2008)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100,
January 1, 2009)

 Announcement of the Ministry of Commer ce Issuing the "2009 Graded License-
Issuing List of Commodities Subject to Export License Administration" (Ministry of
Commerce, Notice (2008) No. 124, January 1, 2009)

 Announcement Regarding Printing "Working Rules on Issuing Export Licenses"
(Ministry of Commerce, shangpeifa (2008) No. 398, October 9, 2008)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
Bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Passing Down the 2009 Second Batch Regular Trade Coke and
Rare Earth Export Quota (Ministry of Commerce, ShangZiHan (2009) No. 73,
September 8, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88,
October 29, 2009)

 Charter of the China Chamber of Commerc e of Metals, Minera ls and Chemicals
Importers and Exporters

 Charter of the China Coking Industry Association

 Measures for the Administration over Foreign Trade and Economic Social
Organizations (Ministry of Foreign Trade and Economic Cooperation,
February 26, 1991)

 Notice Regarding Printing and Distributi on of Several Regulations for Personnel
Management of Chambers of Commerce fo r Importers and Exporters (Ministry of
Foreign Trade and Economic Cooperation, September 23, 1994)

 Interim Regulations of the Ministry of Foreign Trade and Ec onomic Cooperation on
Punishment for Conduct at Exporting at Lower-than-Normal Price (Ministry of
Foreign Trade and Economic Cooperation, March 20, 1996)

 Notice Regarding Rules for Contract Declaration for Chemicals-Related Verification
and Stamp Products (China Chamber of Commerce of Metals, Minerals and
Chemicals Importers and E xporters Petroleum and Chem icals Products Department,
December 30, 2003)

 Online Verification and Certification Oper ating Steps (China Chamber of Commerce
of Metals, Minerals and Chemicals Importers and Exporters)

 Rules for Coordination with Respect to Cu stoms Price Review of Export Products,
(Ministry of Foreign Trade and Economic Cooperation guanzonghanzi No. 21, 1997)

 Notice of the Rules on Price Reviews of Export Products by the Customs, (Ministry
of Foreign Trade and Economic Cooperation guanzonghanzi No. 21, 1997)

 Notice on the Issuance of "Various Provisions on the Strengthening of Export Product
Coordination and Management" (Ministry of Foreign Economic Relations and Trade,
jinchufa (1991) No. 52, February 22, 1991)

 "Various Provisions on the Strengtheni ng of Export Product Coordination and
Management" (Ministry of Foreign Economic Relations and Trade, jinchufa (1991)
No. 52, February 22, 1991)

 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)

 as well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 The European Communities considers that these measures are inconsistent with Article VIII:1
and VIII:4, Article X:1 and X:3(a), and Article XI:1 of the GATT 1994 and paragraphs 2(A)2, 5.1, 5.2
and 8.2 of Part I of the Accession Protocol, as well as China's obligations under the provisions of
paragraph 1.2 of Part I of the Accession Protocol, which incorporates commitments in paragraphs 83,
84, 162, and 165 of the Working Party Report.

 Accordingly, the European Communities respect fully requests that, pursuant to Article 6 of
the DSU, the Dispute Settlement Body establish a pane l to examine this matter, with the standard
terms of reference as set out in Article 7.1 of the DSU.

 The European Communities asks that this request be placed on the agenda for the meeting of
the Dispute Settlement Body to be held on 19 November 2009.

ANNEX III

9 November 2009

 (09-5568)
 Original: English

Request for the Establishment of a Panel by Mexico

 The following communication, dated 4 November 2009, from the delegation of Mexico to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 On 21 August 2009, Mexico requested consulta tions with the Government of the People's
Republic of China ("China") pursuant to Articles 1 and 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU") and Article XXII of the General
Agreement on Tariffs and Trade 1994 ("GATT 1994") with respect to China's restraints on the
exportation from China of various forms of bauxite
1, coke 2, fluorspar 3, magnesium 4, manganese 5,
silicon carbide 6, silicon metal 7, yellow phosphorus 8, and zinc 9 (the "materials"). Mexico held

1 Bauxite includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes, as listed in Attachment 1 of Notice "2009 Ex port Licensing Management Commodities List" (Ministry
of Commerce and General Administration of Customs, Notice (2008) No. 100, January 1, 2009) ("2009 Export
Licensing List") and/or the following eight-digit HS numbers as listed in Table 7 of Notice Regarding the 2009
Tariff Implementation Program (State Council Tariff Policy Commission, shuiweihui (2008) No. 40,
January 1, 2009) ("2009 Export Duty List"): 2508300000/25083000, 2606000000/26060000, 26204000.
2 Coke includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the 2009 Export
Duty List: 2704001000/27040010.
3 Fluorspar includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 2529210000/25292100, 2529220000/25292200.
4 Magnesium includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 81041100, 81041900, 81042000.
5 Manganese includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 26020000, 8111001010/81110010, 8111001090/81110010.
6 Silicon carbide includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 2849200000, 3824909910.

consultations with China on September 1-2, 2009. Those consultations unfortunately did not resolve
the dispute.

I. Export Quotas

 China subjects the exportation of bauxite, c oke, fluorspar, silicon carbide, and zinc to
quantitative restrictions such as quotas.

 Mexico understands that these Chinese measures are reflected in, among others:

 Foreign Trade Law of the People's Republic of China (adopted at the 8
th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures for the Administration of E xport Commodities Quotas (Order of the
Ministry of Foreign Trade and Economic Cooperation No. 12, adopted on
December 20, 2001, January 1, 2002)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Measures for the Administration of the Organs for Issuing the Licenses of Import and
Export Commodities (Ministry of Fore ign Trade and Econom ic Cooperation,
waijingmaopeiguanhanzi (1999) No. 68, September 21, 1999)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

 Working Rules on Issuing Export Licenses (Ministry of Commerce, shangpeifa
(2008) No. 398, October 9, 2008)

7 Silicon metal includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 28046900.
8 Yellow phosphorus includes but is not limited to items falling under the following ten-digit Chinese
Commodity Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the
2009 Export Duty List: 28047010.
9 Zinc includes but is not limited to items falling under the following ten-digit Chinese Commodity
Codes as listed in the 2009 Export Licensing List and/or the eight-digit HS numbers as listed in the 2009 Export
Duty List: 2608000001/26080000, 2608000090/26080000, 790111111000/790111100, 7901119000/79011190,
7901120000/79011200, 7901200000/79012000, 79020000, 26201100, 26201900.

 Rules on the Administration of Import and Export License Certificates (Ministry of
Foreign Trade and Economic Cooperati on, waijingmaopeizi (1999) No. 87,
December 6, 1999)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice Regarding Passing Down the 2009 First Batch Regular Trade Coke Export
Quota (Ministry of Commerce, shangmaohan (2008) No. 140, January 1, 2009)

 2009 Coke Export Quota Declaration Cond itions and Declaration Procedures
(Ministry of Commerce, Notice (2008) No. 76, October 13, 2008)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100,
January 1, 2009)

 Announcement of the Ministry of Commer ce Issuing the "2009 Graded License-
Issuing List of Commodities Subject to Export License Administration" (Ministry of
Commerce, Notice (2008) No. 124, January 1, 2009)

 Announcement Regarding Printing "Working Rules on Issuing Export Licenses"
(Ministry of Commerce, shangpeifa (2008) No. 398, October 9, 2008)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Passing Down the 2009 Second Batch Regular Trade Coke and
Rare Earth Export Quota (Ministry of Commerce, shangzihan (2009) No. 73,
September 8, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88, October 29,
2009)

 As well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 Mexico considers that these measures are incons istent with Article XI:1 of the GATT 1994 as
well as China's obligations under the provisions of paragraph 1.2 of Part I of the Protocol on the
Accession of the People's Republic of China (WT/L/432) ("Accession Protocol"), which incorporates
commitments in paragraphs 162 and 165 of the Working Party Report on the Accession of China
(WT/MIN(01)/3) ("Working Party Report").

II. Export Duties

 China subjects the materials to export duties.

 China imposes export duty rates, "temporary" expo rt duty rates, and/or "special" export duty
rates of various magnitudes on bauxite, coke, fluorspar, magnesium, manganese, silicon metal, yellow
phosphorus, and zinc. These export duties are imposed either on materials that are not listed in Annex
6 of the Accession Protocol, or on materials that are listed in Annex 6 of the Accession Protocol, but
at rates that exceed the maximum rates designated in Annex 6.

 In addition, as discussed in Sec tion III below, China allocates the quotas
10 imposed on the
exportation of bauxite, fluorspar, and silicon carbide through a bidding system. In connection with
the administration of this bidding system, China requires enterprises to pay a charge in order to export
these materials. However, bauxite, fluorspar, a nd silicon carbide are not listed in Annex 6 of the
Accession Protocol.

 Mexico understands that these Chinese measures are reflected in, among others:

 Customs Law of the People's Republic of China (adopted at the 19
th Meeting of the
Standing Committee of the Sixth Nationa l People's Congress on January 22, 1987,
amended July 8, 2000)

 Regulations of the People's Republic of Ch ina 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 October 29, 2003, January 1, 2004)

 Notice Regarding the 2009 Tariff Implemen tation Program (State Council Tariff
Policy Commission, shuiweihui (2008) No. 40, January 1, 2009)

10 Discussed in Section I above.

 Foreign Trade Law of the People's Republic of China (adopted at the 8
th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100,
January 1, 2009)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88, October 29,
2009)

 As well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 Mexico considers that these measures are incons istent with paragraph 11.3 of Part I of the
Accession Protocol, as well as China's obligations unde r the provisions of paragraph 1.2 of Part I of
the Accession Protocol, which incorporates commitments referred to in paragraph 342 of the Working
Party Report.

III. Additional Restraints Imposed on Exportation

 In addition to the export quotas and export du ties discussed in Sections I and II above, China
imposes other restraints on the exportation of the mate rials, administers its measures in a manner that
is not uniform, impartial, and reasonable, impo ses excessive fees and formalities on exportation, and
does not publish certain measures pertaining to requirements, restrictions, or prohibitions on exports.

 China administers the export quotas imposed on bauxite, coke, fluorspar, silicon carbide, and
zinc discussed in Section I above, through its mi nistries and other organizations under the State
Council as well as chambers of commerce and industry associations, in a manner that restricts exports
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 individuals to export.

 China allocates the export quotas imposed on bauxite, fluorspar, and silicon carbide discussed
in Section I above, through a bidding system. Chin a administers the requirements and procedures for
this bidding system through its ministries and ot her organizations under the State Council as well as
chambers of commerce and industry associations, in a manner that restricts exports and is not
uniform, impartial and reasonable. In connection with the administration of this bidding system,
China also requires foreign-invest ed enterprises to satisfy certain criteria in order to export these
materials that Chinese enterprises need not satisfy. Further, China requires enterprises to pay a charge
in order to export these materials that is excessive and imposes excessive formalities on the
exportation of these materials.

 China does not publish the amount for the ex port quota for zinc or any conditions or
procedures for applying entities to qualify to export zinc.

 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 discussed in Section I, as an additional restraint on the
exportation of those materials.

 China also imposes quantitative r estrictions on the exportation of the materials by requiring
that prices for the materials meet or exceed a mini mum price before they may be exported. Further,
through its ministries and other organizations un der the State Council as well as chambers of
commerce and industry associations, China admini sters the price requirements in a manner that
restricts exports and is not uniform, impartial, a nd reasonable. China also does not publish certain
measures relating to these requirements in a manner that enables governments and traders to become
acquainted with them.

 Mexico understands that these Chinese measures are reflected in, among others:

 Foreign Trade Law of the People's Republic of China (adopted at the 8
th Session of
the Standing Committee of the Tenth Nati onal People's Congress on April 6, 2004,
promulgated on July 1, 2004)

 Regulation of the People's Republic of China on the Administration of the Import and
Export of Goods (passed at the forty-sixth executive meeting of the State Council on
October 31, 2001, January 1, 2002)

 Measures for the Administration of License for the Export of Goods (Order of the
Ministry of Commerce (2008) No. 11, July 1, 2008)

 Measures for the Administration of E xport Commodities Quotas (Order of the
Ministry of Foreign Trade and Economic Cooperation No. 12, adopted on
December 20, 2001, January 1, 2002)

 Measures of Quota Bidding for Export Co mmodities (Decree of the Ministry of
Foreign Trade and Economic Cooperation No. 11, adopted on December 20, 2001,
January 1, 2002)

 Measures for the Administration of the Organs for Issuing the Licenses of Import and
Export Commodities (Ministry of Fore ign Trade and Econom ic Cooperation,
waijingmaopeiguanhanzi (1999) No. 68, September 21, 1999)

 Working Rules on Issuing Export Licenses (Ministry of Commerce, shangpeifa
(2008) No. 398, October 9, 2008)

 Rules on the Administration of Import and Export License Certificates (Ministry of
Foreign Trade and Economic Cooperati on, waijingmaopeizi (1999) No. 87,
December 6, 1999)

 Implementation Rules of Export Quota Biddi ng for Industrial Products (Ministry of
Foreign Trade and Economic Cooperation, November 8, 2001)

 Notice Regarding 2009 Export Quota Amounts for Agricultural and Industrial
Products (Ministry of Commerce, Notice (2008) No. 83, January 1, 2009)

 Notice Regarding Passing Down the 2009 First Batch Regular Trade Coke Export
Quota (Ministry of Commerce, shangmaohan (2008) No. 140, January 1, 2009)

 2009 Coke Export Quota Declaration Cond itions and Declaration Procedures
(Ministry of Commerce, Notice (2008) No. 76, October 13, 2008)

 Notice "2009 Export Licensing Management Commodities List" (Ministry of
Commerce and General Administration of Customs, Notice (2008) No. 100,
January 1, 2009)

 Announcement of the Ministry of Commer ce Issuing the "2009 Graded License-
Issuing List of Commodities Subject to Export License Administration" (Ministry of
Commerce, Notice (2008) No. 124, January 1, 2009)

 Announcement Regarding Printing "Working Rules on Issuing Export Licenses"
(Ministry of Commerce, shangpeifa (2008) No. 398, October 9, 2008)

 Announcement of Ministry of Commerce on Matters regarding the First Bidding for
Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement
(2008) No. 85, October 30, 2008)

 Announcement of Ministry of Commerce on the Notice for the Second Invitation for
the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce,
Announcement (2009) No. 42, June 9, 2009)

 Circular of the Ministry of Foreign Trade and Economic Cooperation on Distribution
of the "Implementation Rules of Expor t Quota Bidding for Industrial Products"
(Ministry of Foreign Trade and Economic Cooperation, issued on November 8, 2001)

 Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation for bid for
Export Commodity Quotas, December 11, 2008)

 Quotas of Bauxite of 2009 (Committee fo r the Invitation for bid for Export
Commodity Quotas, December 10, 2008)

 Quotas of Silicon Carbide of 2009 (Committe e for the Invitation for bid for Export
Commodity Quotas, December 11, 2008)

 Announcement on the Second Invitation for the Bidding of Select Industrial Product
Export Quotas in 2009 (Committee for the Invitation for bid for Export Commodity
Quotas, September 16, 2009)

 Quotas of Silicon Carbide of 2009, Sec ond Round (Committee for the Invitation for
Bid for Export Commodity Quotas, September 16, 2009)

 Notice Regarding Passing Down the 2009 Second Batch Regular Trade Coke and
Rare Earth Export Quota (Ministry of Commerce, ShangZiHan (2009) No. 73,
September 8, 2009)

 Notice Regarding Announcement of the 2010 Export Quota Amounts for Agricultural
and Industrial Products (Ministry of Commerce, Notice (2009) No. 88,
October 29, 2009)

 Charter of the China Chamber of Commerc e of Metals, Minera ls and Chemicals
Importers and Exporters

 Charter of the China Coking Industry Association

 Measures for the Administration over Foreign Trade and Economic Social
Organizations (Ministry of Foreign Trade and Economic Cooperation,
February 26, 1991)

 Notice Regarding Printing and Distributi on of Several Regulations for Personnel
Management of Chambers of Commerce fo r Importers and Exporters (Ministry of
Foreign Trade and Economic Cooperation, September 23, 1994)

 Interim Regulations of the Ministry of Foreign Trade and Ec onomic Cooperation on
Punishment for Conduct at Exporting at Lower-than-Normal Price (Ministry of
Foreign Trade and Economic Cooperation, March 20, 1996)

 Notice Regarding Rules for Contract Declaration for Chemicals-Related Verification
and Stamp Products (China Chamber of Commerce of Metals, Minerals and
Chemicals Importers and E xporters Petroleum and Chem icals Products Department,
December 30, 2003)

 Online Verification and Certification Oper ating Steps (China Chamber of Commerce
of Metals, Minerals and Chemicals Importers and Exporters)

 Rules for Coordination with Respect to Cu stoms Price Review of Export Products,
(Ministry of Foreign Trade and Economic Cooperation guanzonghanzi No. 21, 1997)

 Notice of the Rules on Price Reviews of Export Products by the Customs, (Ministry
of Foreign Trade and Economic Cooperation guanzonghanzi No. 21, 1997)

 Notice on the Issuance of "Various Provisions on the Strengthening of Export Product
Coordination and Management" (Ministry of Foreign Economic Relations and Trade,
jinchufa (1991) No. 52, February 22, 1991)

 "Various Provisions on the Strengtheni ng of Export Product Coordination and
Management" (Ministry of Foreign Economic Relations and Trade, jinchufa (1991)
No. 52, February 22, 1991)

 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)

 As well as any amendments or extensions; related measures; replacement measures;
renewal measures; and implementing measures.

 Mexico considers that these measures are inc onsistent with Article VIII:1(a) and VIII:4,
Article X:1 and X:3(a), and Article XI:1 of the GAT T 1994 and paragraphs 2(A)2, 5.1, 5.2 and 8.2 of
Part I of the Accession Protocol, as well as China's obligations under the provis ions of paragraph 1.2

of Part I of the Accession Protocol, which incor porates commitments in paragraphs 83, 84, 162, and
165 of the Working Party Report.

 Accordingly, Mexico respectfully requests that , pursuant to Article 6 of the DSU, the Dispute
Settlement Body establish a panel to examine this ma tter, with the standard terms of reference as set
out in Article 7.1 of the DSU.

ANNEX IV

2 September 2011
 (11-4301)
 Original: English

Notification of an Appeal by China under Article 16.4 and Article 17
of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (DSU), and under Rule 20(1)
of the Working Procedures for Appellate Review

 The following notification, dated 31 Augus t 2011, from the Delegation of the People's
Republic of China, is being circulated to Members.

Dispute Settlement Body ("DSB") of its decision to appeal certain issues of law and legal
interpretations in the Panel Reports in (WT/DS394, WT/DS395, WT/DS398) ("Panel Report"). As set out in this notice of appeal,
and pursuant to Article 17.13 of the DSU, China requ ests that the Appellate Body reverse or modify
various legal findings and conclusions of the Panel, as a result of the errors identified below.
2. Pursuant to Rule 20(2)(d)(iii) of the Working Procedures for Appellate Review , this notice of
appeal includes an indicative list of the paragraphs of the Panel Report containing the alleged errors,
without prejudice to China's ability to refer to othe r paragraphs of the Panel Report in the context of
its appeal.
I. A
PPEAL OF THE PANEL'S FINDING THAT SECTION III OF THE COMPLAINANTS' PANEL
REQUESTS "PRESENTS THE PROBLEM CLEARLY" BY PROVIDING SUFFICIENT
CONNECTIONS BETWEEN THE 37 LISTED MEASURES AND THE 13 LISTED TREATY
PROVISIONS
3. The Panel erred in its interpretation and applica tion of Article 6.2 of the DSU, in finding, in
paragraph 77 of its Second Prelim inary Ruling of 1 October 2010 and paragraph 7.3(b) of the Panel

Report, that Section III of the Complainants' Panel Requests
1 complies with the requirement to
"provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly".
4. China requests that the Appellate Body reverse this finding, and find that Section III of the
Panel Requests does not comply with Article 6.2 of the DSU, with the exception of the Complainants'
claims under Article X:1 of the GATT 1994 regarding non-publication of measures concerning zinc.
5. As a consequence of this reversal, China also requests that the Appellate Body reverse the
Panel findings regarding claims pur portedly made by the Complainants on the basis of Section III of
the Panel Requests, including the findings in paragr aphs 7.669; 7.670; 7.678; 7.756; 7.807; 7.958;
7.1082; 7.1102; 7.1103; 8.4(a)-(b); 8.5(b); 8.6 (a)-(b ); 8.11(a), (c), (e) and (f); 8.12(b); 8.13(a)-(b);
8.18(a)-(b); 8.19(b) and 8.20(a)-(b) of the Panel Report.
II. APPEAL OF THE PANEL'S DECISION TO MAKE RECOMMENDATIONS WITH RESPECT TO
THE "SERIES OF MEASURES" THAT HAVE AN ONGOING EFFECT THROUGH ANNUAL
REPLACEMENT MEASURES
6. China appeals the Panel's recommendations in pa ragraphs 8.8; 8.15 and 8.22 of the Panel
Report that China must bring its export duty and quota measures into conformity with its WTO
obligations, to the extent that the Panel's reco mmendations apply to annual replacement measures
regarding export quotas and export duties on products at issue in these disputes.
7. In making recommendations extending to measure s excluded from the dispute, the Panel
acted inconsistently with Article 7.1 of the DSU; failed to make an objective assessment of the matter
under Article 11 of the DSU; and, made recommendations on measures that are not part of the matter,
inconsistently with Article 19.1 of the DSU.
8. China requests that the Appellate Body reverse the Panel's recommendations in
paragraphs 8.8; 8.15 and 8.22 of the Panel Report to the extent that they apply to annual replacement
measures.
III. A
PPEAL OF THE PANEL'S FINDING THAT CHINA DOES NOT HAVE THE RIGHT TO INVOKE
ARTICLE XX OF THE GATT 1994 IN DEFENSE OF A CLAIM UNDER PARAGRAPH 11.3 OF
CHINA'S ACCESSION PROTOCOL
9. China appeals the Panel's erroneous interpretati on and application of Pa ragraphs 1.2 and 11.3
of China's Accession Protocol2 and Paragraphs 170 and 342 of China's Working Party Report3 as not
according China the right to invoke Article XX of the GATT 1994 in defense of a claim under
Paragraph 11.3 of China's Accession Protocol and Paragraph 170 of China's Working Party Report.

1 – Request for the
Establishment of a Panel by the European Communities, WT/DS395/7 (9 November 2009); – Request for the Establishment of a Panel by Mexico,
WT/DS398/6 (9 November 2009); –
Request for the Establishment of a Panel by the United States, WT/DS394/7 (9 November 2009).
2Protocol on the Accession of the People’s Republic of China , WT/L/432 (23 November 2001)
("Accession Protocol").
3Report of the Working Party on the Accession of China , WT/MIN(01)/3 (10 November 2001)
("Working Party Report").

10. As a result of these errors, China requests th at the Appellate Body reverse the Panel's
findings, in paragraphs 7.158; 7.1 59; 8.2 (b)-(c); 8.9 (b)-(c) and 8.16 (b)-(c) of the Panel Report, that
China may not seek to justify export duties pursuant to Article XX of the GATT 1994.
IV. A
PPEAL OF THE PANEL'S INTERPRETATION AND APPLICATION OF THE TERM
"TEMPORARILY" AND THE PANEL'S INTERPRETATION OF THE TERM "CRITICAL
SHORTAGES" IN ARTICLE XI:2(A) OF THE GATT 1994, AND THE PANEL'S ASSESSMENT
OF THE MATTER, UNDER ARTICLE 11 OF THE DSU
11. China appeals the Panel's erroneous interpreta tion and application of the term "temporarily"
and the Panel's erroneous interpretation of the term "critical shortages", in Article XI:2(a) of the
GATT 1994. The Panel also failed to make an obj ective assessment of the matter, as required under
Article 11 of the DSU. Specifically, the Panel fa iled to assess properly evidence that China's export
restriction is annually reviewed a nd renewed, and employed interna lly inconsistent and incoherent
reasoning in its assessment of the possibility to prevent or relieve critical shortages of exhaustible
natural resources through the temporary application of export restrictions.
12. As a result of these errors, China requests th at the Appellate Body reverse the Panel's
interpretation and application of the term "tempor arily" and the Panel's interpretation of the term
"critical shortages", as set out in paragraphs 7.2 57-7.258; 7.297-7.302; 7.305; 7.306; 7.346; 7.349;
7.351; 7.354 and 7.355 of the Panel Report.
V. APPEAL OF THE PANEL'S INTERPRETATION OF THE PHRASE "MADE EFFECTIVE IN
CONJUNCTION WITH" IN ARTICLE XX(G) OF THE GATT 1994
13. China appeals the Panel's erroneous interpre tation of the phrase "… made effective in
conjunction with …", in Article XX(g) of th e GATT 1994. Specifically, the Panel erred in
interpreting this phrase to require a showing that th e "purpose" of a challenged measure is to make
effective restrictions on domestic production or consumption. As a result of this error, China requests
that the Appellate Body reverse the Panel's finding in paragraph 7.397 of the Panel Report.
VI. APPEAL OF THE PANEL'S INTERPRETATION AND APPLICATION OF PARAGRAPHS 1.2
AND 5.1 OF CHINA'S ACCESSION PROTOCOL AND PARAGRAPHS 83 AND 84 OF THE
WORKING PARTY REPORT IN CONNECTION WITH THE PRIOR EXPORT PERFORMANCE
AND MINIMUM CAPITAL REQUIREMENTS
14. China appeals the Panel's erroneous interpretati on and application of Pa ragraphs 1.2 and 5.1
of China's Accession Protocol , read in combination with Para graphs 83(a), 83(b), 83(d), 84(a),
and 84(b) of China's Working Party Report , to prohibit any "examination and approval system" for
WTO-consistent export quotas opera ted subsequent to 11 December 2004, including elimination of
"export performance" and "prior experience re quirements" and minimum registered capital
requirements. As a result of these errors, China re quests that the Appellate Body reverse the Panel's
findings in paragraphs 7.655; 7.6 65; 7.669; 7.670; 7.678; 8.4(a)-(b); 8.11(a); 8.11(c) and 8.18(a)-(b)
of the Panel Report.
VII. APPEAL OF THE PANEL'S INTERPRETATION AND APPLICATION OF ARTICLE XI:1 OF THE
GATT 1994, AND ITS ASSESSMENT OF THE MATTER UNDER ARTICLE 11 OF THE DSU, IN
CONNECTION WITH CHINA'S EXPORT LICENSING REGIME
15. China appeals various elements of the Panel' s findings under Article XI:1 of the GATT 1994
in connection with China's export licensing requirement.

16. First, the Panel erred in interpreting Article XI:1 to prohibit a measure as such, even where, as
a matter of municipal law, the measure can always be—and has always been—interpreted and applied
in a WTO-consistent manner.
17. Second, the Panel also erred in applying its err oneous interpretation of Article XI:1 to China's
export licensing requirement. Specifically, the Panel erroneously found that Article 11(7) of China's
Measures for the Administration of License for the Export of Goods and Articles 5(5) and 8(4) of
China's Working Rules on Issuing Export Licenses , as such , are inconsistent with Article XI:1,
because they accord discretion to request undefine d or unspecified documents or materials of
applicants for export licenses.
18. Third, the Panel erred in its assessment of the matter, under Article 11 of the DSU.
Specifically, the Panel had no evidentiary basis on wh ich to find that any documents requested of an
applicant pursuant to Article 11(7) of China's Measures for the Administration of License for the
Export of Goods and Articles 5(5) and 8(4) of China's Working Rules on Issuing Export Licenses
would be of such a nature as to impose an export restriction.
19. As a result of these errors, China requests that the Appellate Body reverse the Panel's findings
and recommendations, at paragraphs 7.921; 7.946; 7. 948; 7.958; 8.5(b); 8.8; 8.12(b); 8.15; 8.19(b)
and 8.22 of the Panel Report.
VIII. A
PPEAL OF THE PANEL'S INTERPRETATION AND APPLICATION OF ARTICLE X:3(A) OF
THE GATT 1994, AND ITS ASSESSMENT OF THE MATTER UNDER ARTICLE 11 OF THE
DSU, IN CONNECTION WITH THE "OPERATION CAPACITY" CRITERION FOR EXPORT
QUOTA ADMINISTRATION
20. China appeals various elements of the Panel' s findings under Article X:3(a) of the GATT
1994 in connection with the "operation capacity" cr iterion for export quota administration, under
Article 19 of China's Measures for the Administration of Export Commodities Quotas.
21. First, the Panel erred in interpreting Article X:3(a) to prohibit a measure as such, even where,
as a matter of municipal law, the measure can al ways be—and has always been—interpreted and
applied in such a way as to avoid WTO-inconsistent administration.
22. Second, the Panel also erred in applying its e rroneous interpretation of Article X:3(a) to
China's "operation capacity" criterion. Specifically , the Panel erroneously found that Article 19 of
China's Measures for the Administration of Export Commodities Quotas , as such, is inconsistent with
Article X:3(a), because the term "operation capacity" is undefined, thus reserving the discretion for
China to interpret and apply the term in such a manner as to constitute WTO-inconsistent
administration.
23. Third, the Panel erred in its assessment of the matter, under Article 11 of the DSU.
Specifically, the Panel had no evidentiary basis on wh ich to find that the term "operation capacity"
would be interpreted and applied in a manner that would constitute WTO-inconsistent administration.
24. As a result of these errors, China requests that the Appellate Body reverse the Panel's findings
and recommendations, at paragraphs 7.708; 7.742-7.7 46; 7.748-7.752; 7.756; 8.11(e) and 8.15 of the
Panel Report.

ANNEX V

12 September 2011

 (11-4373)
 Original: English

Notification of an Other Appeal by the United States
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 6 September 2011, from the Delegation of the United States,
is being circulated to Members.

Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 23 of the Working Procedures for Appellate Review , the
United States hereby notifies its decision to appeal to the Appellate Body certain issues of law
covered in the Report of the Panel in (WT/DS394/R) ("Panel Report") and certain legal interpretations developed by the Panel.

1. The United States seeks review by the Appellate Body of the Panel's legal conclusion that
China's requirement that enterprises pay a quota a llocation fee (also referred to as the total award
price or bid-winning price) in order to export bauxite, fluorspar, and silic on carbide under its export
quota regime
1 is not inconsistent with Article VIII:1(a) of the General Agreement on Tariffs and
Trade 1994 or Paragraph 11.3 of China's Protocol of Accession to the WTO. These conclusions are
in error and are based on erroneous findings on issu es of law and legal interpretations of the fees and
charges subject to Article VIII.2 The United States requests the Appe llate Body to reverse the Panel's
legal interpretation and conclusion and to find that China's requirement that enterprises pay a total
award price in order to export bauxite, fluorspar, and silicon carbide under its export quota regime is
inconsistent with Article VIII:1(a) of the GA TT 1994 and Paragraph 11.3 of China's Protocol of
Accession to the WTO.

1See Panel Report, Section VII.C.2(b). Relevant legal instruments include the Import and Export
Regulations, Quota Bidding Measures , Quota Bidding Implementation Rules , 2009 First Round Fluorspar
Bidding Procedures , 2009 First Round Bauxite Bidding Procedures , and 2009 First Round Silicon Carbide
Bidding Procedures.
2See, e.g., Panel Report, paras. 7.827-7.839, 7.844-7.851, 7.859-7.861, and 8.4(e).

2. The United States also seeks conditional review by the Appellate Body relating to the Panel's
recommendations. If the Appellate Body, pursuant to China's appeal of the Panel's "recommendation
with respect to the 'series of measures' that have an ongoing effect through annual replacement
measures,"
3 were to grant China's request to "reverse the Panel's recommendations in
paragraphs 8.8; 8.15 and 8.22 of the Panel Report to the extent that they apply to replacement
measures,"4 and if the Appellate Body were to find that no recommendation should have been made
on the "series of measures" as they existed as of the date of panel establishment, then the
United States would seek review of the Panel's legal interpretation 5 and conclusion 6 not to make a
recommendation on the export quota and export duty measures that were annually recurring and in
effect on the date of panel establishment, i.e., December 21, 2009, but that subsequently were
replaced or superseded by other legal instruments. In that event, the United States would contend that
this interpretation and conclusion are in error a nd based on erroneous findings on issues of law and
related legal interpretations of Ar ticles 6.2, 7.1, 11, and 19.1 of the DSU. The United States would
request the Appellate Body to reverse the Panel' s legal conclusion and to make the recommendation
provided for in DSU Article 19.1. However, the Appe llate Body would not need to review this legal
interpretation and conclusion if the condition precedent to this appeal is not met.

3See China's Appellant Submission, Section III.
4China's Appellant Submission, para. 167.
5See, e.g., Panel Report, paras. 7.26-7.32.
6See, e.g., Panel Report, paras. 7.33(d), 8.8.

ANNEX VI

12 September 2011

 (11-4371)
 Original: English

Notification of an Other Appeal by the European Union
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 6 Se ptember 2011, from the Delegation of the
European Union, is being circulated to Members.

 Pursuant to Article 16.4 and Article 17 of the DSU, the European Union hereby notifies to the
Dispute Settlement Body its decision to appeal to th e Appellate Body certain issues of law covered in
the Report of the Panel and certain legal interpreta tions developed by the Panel in its Report in the
dispute China – Measures relating to the ex portation of various Raw Materials (WT/DS395/R).
Pursuant to Rule 23(1) of the Working Procedures for Appellate Review , the European Union
simultaneously files this Notice of Other Appeal with the Appellate Body Secretariat.

 For the reasons to be further elaborated in its submissions to the Appellate Body, the
European Union appeals, and requests the Appellate Body to reverse and/or modify the findings,
conclusions and recommendations of the Panel, with respect to the following errors of law and legal
interpretations contained in the Panel Report.
1

I. THE EUROPEAN UNION NEVER REQUESTED THE PANEL "NOT TO MAKE FINDINGS OR
RECOMMENDATIONS ON THE LEGAL INSTRUMENTS TAKING EFFECT ON 1 JANUARY
2010". THE EUROPEAN UNION NEVER "NARROWED THE PANEL'S TERMS OF
REFERENCE DURING THE COURSE OF THE PROCEEDINGS".

1Pursuant to Rule 23(2)(c)(ii)(C) of the Working Procedures for Appellate Review this Notice of Other
Appeal includes an indicative list of the paragraphs of the Panel Report containing the alleged errors, without
prejudice to the ability of the European Union to refer to other paragraphs of the Panel Report in the context of
its appeal.

(a) In paragraph 7.21 of its Report, the Pane l found that the European Union requested
the Panel not to make findings or reco mmendations on the legal instruments taking
effect on 1 January 2010. In paragraph 7. 22 of its Report, the Panel found that the
European Union narrowed the Panel's terms of reference during the course of the
proceedings. The Panel makes reference to these erroneous findings in various other
paragraphs of its Report, such as paragraph 7.24.

(b) In reaching these erroneous legal interp retations and findings, the Panel acted
inconsistently with its obligations under Articles 7.1, 11 and 19.1 of the DSU.

(c) The European Union appeals these erroneous Panel legal interpretations and findings
and requests the Appellate Body to reverse them. The European Union also requests
the Appellate Body to complete the analysis and find that the relevant measures are
inconsistent with China's obligations under the covered agreements and to
recommend that China brings its measures into compliance with its WTO obligations.

ANNEX VII

12 September 2011

 (11-4372)
 Original: English

Notification of an Other Appeal by Mexico
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 6 Septembe r 2011, from the Delegation of Mexico, is being
circulated to Members.

Mexico hereby notifies its decision to appeal to th e Appellate Body certain issues of law covered in
the Panel Report on China – Measures Related To The Ex portation Of Various Raw Materials
(WT/DS398) ("Panel Report"), and certain legal interpretations developed by the Panel in this dispute.

2. Pursuant to Rule 23(2)(c)(ii) of the Working Procedures for Appellate Review , this notice of
appeal includes and indicative list of the paragraphs of the Panel Report cont aining the alleged errors,
without prejudice to Mexico's ability to refer to othe r paragraphs of the Panel Report in the context of
this appeal.

I. Conditional Appeal of the Panel's Recommendations on Annual Export Quota and
 Export Duty Measures

3. Mexico also seeks conditional review by the Appellate Body relating to the Panel's
recommendations. If the Appellate Body, pursuant to China's appeal of the Panel's "recommendation
with respect to the 'series of measures' that have an ongoing effect through annual replacement
measures,"1 were to grant China's request to "reverse the Panel's recommendations in paragraphs 8.8;
8.15 and 8.22 of the Panel Report to the exte nt that they apply to replacement measures," 2 and if the
Appellate Body were to find that no recommenda tion should have been made on the "series of

1See China's Appellant Submission, Section III.
2China's Appellant Submission, para. 167.

measures" as they existed as of the date of panel establishment, then Mexico would seek review of the
Panel's legal interpretation 3 and conclusion 4 not to make a recommendation on the export quota and
export duty measures that were annually recurring a nd in effect on the date of panel establishment,
i.e., December 21, 2009, but that subsequently we re replaced or superseded by other legal
instruments. In that event, Mexico would contend that this interpretation and conclusion are in error
and based on erroneous findings on issues of law and re lated legal interpretations of Articles 6.2, 7.1,
11, and 19.1 of the DSU. Mexico would request the Appellate Body to reverse the Panel's legal
conclusion and to make the recommendation provid ed for in DSU Article 19.1. However, the
Appellate Body would not need to review this legal interpretation and conclusion if the condition
precedent to this appeal is not met.

II. Appeal of the Panel Conclusion that China's Administration of its Export Quota
through the Involvement of the CCCMC Complied With Article X:3(a) of GATT 1994

4. Mexico appeals various elements of the Pa nel's findings under Article X:3(a) of the
GATT 1994 regarding the involvement of the China Chamber of Commerce on Metals, Minerals in
the administration of export quotas.

5. Mexico addresses the following errors in th e Panel's findings and conclusions concerning
China's an CCCMC's administration of quotas
5:

a) First, the Panel erred in its interpretati on of Article X:3(a) as requiring complainants
to demonstrate, in an as such claim, that a challenged measure must necessarily lead
to partial and/or unreasonable administration of export quotas.
b) Second, the Panel erred in its interpreta tion of Article X.3(a) requiring evidence of
partiality/unreasonableness when complainants argue that a measure is inherently
partial/ unreasonable. Proper interpretation of Article X:3(a) leads to the conclusion
that China's delegation of authority to CCCMC is inherently partial/unreasonable.
c) Third, the Panel failed to make an objective assessment of the facts of the case as
required by Article 11 of the DSU with respect to the role of CCCMC in the quota
process. The CCCMC Secretariat's role in administering quotas is much more than
purely administrative in nature. Specifically, the CCCMC gains access to confidential
business information on applicants, exercises discretion in determining qualifying
applicants, and is the sole verifier of certain eligibility data.
6. As a result, Mexico requests that the Appe llate Body reverse the Panel's findings and
conclusions at, e.g., paragraphs 7.784-7.787, 7.795-7.797, 8.18 c) and d) of the Panel Report.

3See, e.g., Panel Report, paras. 7.26-7.32.
4See, e.g., Panel Report, paras. 7.33(d), 8.22.
5See Panel Report, paras. 7.774-7.797.