China Raw Materials: A Controversial Step Towards Evenhanded Exploitation of Natural Resources

16 Pages Posted: 7 Sep 2013 Last revised: 21 Oct 2013

See all articles by Marco Bronckers

Marco Bronckers

Leiden University - Leiden Law School

Keith E. Maskus

University of Colorado at Boulder - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: August 27, 2013

Abstract

This paper discussed the WTO panel and Appellate Body rulings in the China Raw Materials case. This sheds light on the question whether WTO members, when exploiting their natural resources, can give priority to the needs of their domestic market as opposed to the needs of other WTO Members. From the ruling of the Appellate Body, and the unappealed part of the panel decision, one can conclude that a WTO Member normally must ensure an evenhanded distribution of the natural resources that it decides to mine or harvest amongst the WTO membership. The only difference arises where a Member’s citizens or industries face a crisis because of a temporary shortage of an essential product. For those who share an international outlook on the world, this is an acceptable, and even a desirable outcome. The ruling potentially has far-reaching implications for international trade, not only in minerals and metals, but for agricultural and energy goods as well (US restrictions on exports of shale gas are taken as an example). However, in reaching this laudable result, circumscribing the use of export restrictions, the Appellate Body also made a highly regrettable finding. It ruled that China, because of the wording of its Accession Protocol, was not allowed to invoke a public policy justification for certain of its export restrictions (notably: its export duties, on which it had assumed additional commitments). The underlying assumption that sovereign states can sign away their rights to pursue public policies, such as environmental protection, which are generally admitted amongst the WTO membership, is deplorable.

Keywords: WTO, WTO Plus obligations, China, Accession Protocol, dispute settlement, export restrictions, export duties, natural resources, minerals, metals, energy, shale gas, environmental protection, conservation

JEL Classification: F13, Q31, Q32, Q42, Q48, K32, K33, K41

Suggested Citation

Bronckers, Marco and Maskus, Keith E., China Raw Materials: A Controversial Step Towards Evenhanded Exploitation of Natural Resources (August 27, 2013). Available at SSRN: https://ssrn.com/abstract=2321018 or http://dx.doi.org/10.2139/ssrn.2321018

Marco Bronckers (Contact Author)

Leiden University - Leiden Law School ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

Keith E. Maskus

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States
303-492-7588 (Phone)
303-492-8960 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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