CHINA – MEASURES RELATED TO THE EXPORTATION OF RARE EARTHS, TUNGSTEN, AND MOLYBDENUM NOTIFICATION OF AN OTHER 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 23(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Document: AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 23(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Date: 24 April 2014
Document codes: WT/DS431/10
Complainant: U.S.
Respondent: China
Third parties: Brazil, Canada, Colombia, EU, India, Japan, South Korea, Norway, Oman, Saudi Arabia, Taiwan, Vietnam, Argentina, Australia, Indonesia, Turkey, Peru, Russia
Dispute stage: Appellate Body
Agreements cited: Art. XI:1, X:3(a)  GATT 1994Part I, para. 1.2, Part I, para. 11.3, Part I, para. 5.1,   Protocol of Accession

CHINA – MEASURES RELATED TO THE EXPORTATION OF
RARE EARTHS, TUNGSTEN, AND MOLYBDENUM
NOTIFICATION OF AN OTHER 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 23(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
 The following notification, dated 17 April 2014, fr om the Delegation of the People's Republic
of China, is being circulated to Members.

Rare Earths, Tungsten, and Molybdenum (WT/DS431) ("Panel Report").

I. A
PPEAL OF THE PANEL'S INTERPRETATION OF ARTICLE XII:1 OF THE MARRAKESH AGREEMENT
ESTABLISHING THE , READ IN CONJUNCTION WITH PARAGRAPH 1.2,
SECOND SENTENCE, OF CHINA'S ACCESSION PROTOCOL

2. China seeks review by the Appellate Body of th e Panel's interpretation of Article XII:1 of
the Marrakesh Agreement Establishing the (the " Marrakesh
Agreement"), read in conjunction with the second sentence of Paragraph 1.2 of China's Accession
Protocol.1
3. The Panel's interpretation is in error, inter alia, because:
 the Panel failed to give effective meaning to the second sentence of Article XII:1
which does not merely prescribe that newly acceding Members may not pick and
choose among the various covered agreements but have to accept the WTO legal
framework as a single undertaking;
 the Panel failed properly to read Article XII:1 of the Marrakesh Agreement together
with the second sentence of Paragraph 1.2 of China's Accession Protocol;
 the Panel erred in interpreting the terms contained in the second sentence of
Paragraph 1.2 of China's Accession Protocol;
 the Panel unduly found that the words "shall be an integral part of the WTO
Agreement" in the second sentence of Paragraph 1.2 of China's Accession Protocol
leads to the conclusion that China's Accession Protocol is thereby made an integral

1 The relevant analysis by the Panel is contained in paras. 7.73-7.93 of the Panel Report.

part of the Marrakesh Agreement excluding the multilateral trade agreements
annexed thereto.
4. Accordingly, China requests that the Appellate Body reverse the Panel's findings in
paragraphs 7.80, 7.89 and 7.93 of the Panel Report in this regard.
II. A PPEAL OF THE PANEL'S FINDINGS THAT CHINA'S EXPORT QUOTAS ON RARE EARTHS AND TUNGSTEN
DO NOT "RELAT[E] TO" CONSERVATION UNDER ARTICLE XX(G) OF THE GATT 1994

5. China seeks review by the Appellate Body of the Panel's findings and conclusions that
export quotas for rare earths and tungsten do not "relat[e]" to conservation within the meaning of
subparagraph (g) to Article XX of the GATT 1994 beca use they send a perverse signal to domestic
users.
2
6. The Panel's findings are based on errors in the interpretation and application of the
"relating to" element of subparagraph(g) of Article XX, inter alia, because the Panel:
 focused on the design structure and architecture of China's export quotas to the
exclusion of evidence regarding the operat ion of the export quotas together with
other elements of China's comprehensive conservation policy, in circumstances
where China submitted substantial evidence on the operation of the conservation
programme in the marketplace; and
 required China to show that there is no risk that perverse signals to domestic users
might offset the positive effect of conservation signals to foreign users.
7. In addition, China submits that the Panel acted inconsistently with Article 11 of the DSU in
relation to these issues by failing to make an objective assessment of the matter, including an
objective assessment of the facts relating to the existence of "perverse signals" and through
providing incoherent reasoning.
8. Accordingly, China requests the Appellate Body to reverse the Panel's interpretation in
paragraphs 7.279-7.293 to the extent that this inte rpretation required the Panel to examine solely
the structure and design of China's export quotas, as well as the Panel's failure to apply the proper
legal standard and make an objective assessment in paragraphs 7.444, 7.446-7.448, 7.541-7.542,
7.604, 7.725 and 7.731 of the Panel Report.
9. To the extent that these errors taint the Panel's conclusions, in paragraphs 7.600-7.614,
7.810-7.820, 8.2(c), 8.7(c) and 8.12(c) of the Pane l Report, that China's export quotas on rare
earths and tungsten cannot be provisionally justified under subparagraph (g) of Article XX of the
GATT 1994, China requests the Appellate Body also to reverse these findings of the Panel.
III. A PPEAL OF THE PANEL'S FINDINGS THAT THE CHINA 'S EXPORT QUOTAS ON RARE EARTHS, TUNGSTEN
AND MOLYBDENUM ARE NOT "MADE EFFECTIVE IN CONJUNCTION WITH " DOMESTIC RESTRICTIONS
UNDER ARTICLE XX(G) OF THE GATT 1994

10. China seeks review by the Appellate Body of the Panel's findings and conclusions that
China's export quotas on rare earths, tungsten and molybdenum are not "made effective in
conjunction with" domestic restrictions within the meaning off subparagraph (g) of Article XX of
the GATT 1994.
3
11. The Panel's findings are based on errors in the interpretation and application of the "made
effective in conjunction with" domestic restrictions element of subparagraph (g) of Article XX

2 The relevant Panel findings are contained, inter alia, in paras. 7.279-7.293, 7.444, 7.446-7.448,
7.541-7.542, 7.604, 7.725, 7.731. The relevant Panel conclusions are contained, inter alia, in Panel Report,
paras. 7.600-7.614, 7.810-7.820, 8.2(c), 8.7(c) and 8.12(c).
3 The relevant Panel findings are contained, inter alia, in Panel Report, paras. 7.301, 7.314-7.337,
7.568-7.599, 7.792-7.809, and 7.919-7.935. The relevant Panel conclusions are contained in Panel Report,
paras. 7.600-7.614, 7.810-7.820, 7.936-7.944, 8.2(c), 8.7(c) and 8.12(c).

because the Panel erroneously in terpreted and applied the term "made effective in conjunction
with" domestic restrictions to mean that the Panel was:
 required to engage in a separate and distinct enquiry to determine whether, and find
that, China "distributes the burden of conservation-related measures between
domestic and foreign consumers in a balanced way"; 4 "counterbalance[ed]" 5 the
restrictions on domestic and foreign users; or achieved "substantive
complementarity"
6 between foreign and domestic restrictions; and
 confined to assessing the "objective structure, design and architecture" 7 of China 's
regulatory system of conservation measures and it was precluded from having
regard to "the actual effects which a regulatory system has in the market place",
8 in
circumstances where China submitted substa ntial evidence on the operation of the
conservation programme in the marketplace.
12. In addition, China submits that the Panel acted inconsistently with Article 11 of the DSU in
relation to these issues by failing to make an objective assessment of the matter, including an
objective assessment of the facts, through its lack of objectivity in the treatment of evidence it
considered relevant; through its inconsistent reasoning in finding that none of the domestic
measures advanced by China amounts to a "domestic restriction"; and by relying on inconsistent
reasoning as well as a double standard of proof in comparing the relative burden of China's
restrictions on foreign and domestic users.
13. Accordingly, China requests that the Appellate Body reverse the Panel's interpretation in
paragraphs 7.301 and 7.314-7.337 with respect to the Panel's additional enquiry regarding the
relative burdens borne by domestic and foreign interests under relevant conservation measures, as
well as the Panel's failure to apply the proper legal standard and make an objective assessment in
paragraphs 7.568-7.599, 7.792-7.809, and 7.919-7.935 of the Panel Report.
14. To the extent that these errors taint the Panel's conclusions, in paragraphs 7.600-7.614,
7.810-7.820, 7.936-7.944, 8.2(c), 8.7(c) and 8.12(c ) of the Panel Report, that China's export
quotas on rare earths, tungsten and molybdenum cannot be provisionally justified under
subparagraph (g) of Article XX of the GATT 1994, China requests the Appellate Body also to
reverse these findings of the Panel.