The WTO and China's Raw Material Export Restrictions: What's Next?

As those following the rare earth element saga are now aware, the WTO Dispute Settlement Panel (DSP) made recommendations on July 7 regarding US and EU complaints about China's use of export restrictions on a number of raw materials. Although the list of raw materials submitted by the complainant countries did not include any REEs, many have equated the DSP's conclusions with a judgment on China's REE export restrictions.

The DSP found China's application of export duties and quotas on various raw materials inconsistent with both the country's obligations under its accession to the WTO as well as with Article XI of the General Agreement on Tariffs and Trade (GATT). However, details of the DSP decision highlight the fact that export restrictions are not entirely precluded by the WTO, only that China's methods of application were not in accordance with the country's WTO obligations. The DSP's recommendations - along with China's response - may be the best indicator of what export policies are to come, not only for REEs, but also for many other strategic and minor metals, including antimony, indium, tungsten and germanium.