WT/DS431/AB/R WT/DS432/AB/R WT/DS433/AB/R 7 August 2014 (14-4626) Page: 1/177 Original: English CHINA – MEASURES RELATED TO THE EXPORTATION OF RARE EARTHS, TUNGSTEN, AND MOLYBDENUM AB-2014-3 AB-2014-5 AB-2014-6 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: WT/DS431/ABR; WT/DS432/AB/R; and WT/DS433/AB/R. The cover page, preliminary pages, sections 1 through 5, and the annexes are common to all three Reports. The page header throughout the document bears the three document symbols WT/DS431/ABR; WT/DS432/AB/R; and WT/DS433/AB/R, with the following exceptions: section 6 on pages US-154 to US-155, which bears the document symbol for and contains the Appellate Body's conclusions and recommendations in the Appellate Body Report WT/DS431/AB/R; section 6 on pages EU-156 to EU-157, which bears the document symbol for and contains the Appellate Body's conclusions and recommendations in the Appellate Body Report WT/DS432/AB/R; and section 6 on pages JPN-158 to JPN-159, which bears the document symbol for and contains the Appellate Body's conclusions and recommendations in the Appellate Body Report WT/DS433/AB/R. WT/DS431/AB/R • WT/DS432/AB/R • WT/DS433/AB/R - 2 - Table of Contents 1 INTRODUCTION ................................................................................................ 16 1.1 Panel proceedings ............................................................................................. 17 1.2 Appellate proceedings ...................................................................................... 22 1.3 Procedural issues raised in these appeals ......................................................... 24 1.3.1 Allocation of appeal numbers ................................................................................ 24 1.3.2 China's challenge to the United States' Notice of Appeal and request for an extension of the time periods for filing submissions .................................................. 24 1.3.3 Consolidation of the appellate proceedings and Japan's request for an extension of the time period for filing third participants' submissions ........................................ 25 1.3.4 Requests by the complainants for separate reports .................................................. 26 2 ARGUMENTS OF THE PARTICIPANTS AND THIRD PARTICIPANTS ..................... 26 2.1 Claims of error by the United States – Appellant (DS431) ................................ 26 2.2 Arguments of China – Appellee (DS431) ........................................................... 28 2.3 Claims of error by China – Appellant (DS432 and DS433) and other appellant (DS431) ............................................................................................ 29 2.3.1 Article XII:1 of the Marrakesh Agreement and Paragraph 1.2 of China's Accession Protocol ............................................................................................... 29 2.3.1.1 Paragraph 1.2 of China's Accession Protocol ............................................................ 29 2.3.1.2 Article XII:1 of the Marrakesh Agreement ............................................................... 31 2.3.1.3 The relationship between China's Accession Protocol, on the one hand, and the Marrakesh Agreement and the Multilateral Trade Agreements annexed thereto, on the other hand ............................................................................................... 32 2.3.2 Article XX(g) of the GATT 1994 ............................................................................. 33 2.3.2.1 Article XX(g) – "Relating to" the conservation of exhaustible natural resources ............. 33 2.3.2.2 Article XX(g) – "Made effective in conjunction with" restrictions on domestic production or consumption ................................................................................... 38 2.4 Arguments of the United States – Appellee (DS431) and third participant (DS432 and DS433) ........................................................................ 44 2.4.1 Article XII:1 of the Marrakesh Agreement and Paragraph 1.2 of China's Accession Protocol ............................................................................................... 44 2.4.1.1 Paragraph 1.2 of China's Accession Protocol ............................................................ 45 2.4.1.2 Article XII:1 of the Marrakesh Agreement ............................................................... 46 2.4.1.3 The relationship of accession protocol provisions with the Marrakesh Agreement and the Multilateral Trade Agreements annexed thereto ........................................... 47 2.4.2 Article XX(g) of the GATT 1994 ............................................................................. 48 2.4.2.1 Article XX(g) – "Relating to" the conservation of exhaustible natural resources ............. 48 2.4.2.2 Article XX(g) – "Made effective in conjunction with" restrictions on domestic production or consumption ................................................................................... 51 2.5 Arguments of the European Union – Appellee (DS432) and third participant (DS431 and DS433) ........................................................................ 54 2.5.1 Article XII:1 of the Marrakesh Agreement and Paragraph 1.2 of China's Accession Protocol ............................................................................................... 54 2.5.1.1 Paragraph 1.2 of China's Accession Protocol ............................................................ 54 WT/DS431/AB/R • WT/DS432/AB/R • WT/DS433/AB/R - 3 - 2.5.1.2 Article XII:1 of the Marrakesh Agreement ............................................................... 56 2.5.1.3 The relationship of accession protocol provisions with the Marrakesh Agreement and the Multilateral Trade Agreements annexed thereto ........................................... 56 2.5.2 Article XX(g) of the GATT 1994 ............................................................................. 57 2.5.2.1 Article XX(g) – "Relating to" the conservation of exhaustible natural resources ............. 57 2.5.2.2 Article XX(g) – "Made effective in conjunction with" restrictions on domestic production or consumption ................................................................................... 61 2.6 Arguments of Japan – Appellee (DS433) and third participant (DS431 and DS432) ....................................................................................................... 65 2.6.1 Article XII:1 of the Marrakesh Agreement and Paragraph 1.2 of China's Accession Protocol ............................................................................................... 65 2.6.1.1 Paragraph 1.2 of China's Accession Protocol ............................................................ 65 2.6.1.2 Article XII:1 of the Marrakesh Agreement ............................................................... 66 2.6.1.3 The relationship of accession protocol provisions with the Marrakesh Agreement and the Multilateral Trade Agreements annexed thereto ........................................... 67 2.6.2 Article XX(g) of the GATT 1994 ............................................................................. 68 2.6.2.1 Article XX(g) – "Relating to" the conservation of exhaustible natural resources ............. 68 2.6.2.2 Article XX(g) – "Made effective in conjunction with" restrictions on domestic production or consumption ................................................................................... 71 2.7 Arguments of the third participants .................................................................. 74 2.7.1 Argentina ........................................................................................................... 74 2.7.2 Australia ............................................................................................................ 75 2.7.3 Brazil ................................................................................................................ 75 2.7.4 Canada .............................................................................................................. 77 2.7.5 Colombia ........................................................................................................... 79 2.7.6 European Union .................................................................................................. 79 2.7.7 Korea ................................................................................................................ 79 2.7.8 Norway ............................................................................................................. 80 2.7.9 Russia ............................................................................................................... 80 2.7.10 Saudi Arabia ...................................................................................................... 80 2.7.11 Turkey .............................................................................................................. 81 3 ISSUES RAISED IN THESE APPEALS .................................................................. 82 4 BACKGROUND AND OVERVIEW OF THE MEASURES AT ISSUE ........................... 83 5 ANALYSIS OF THE APPELLATE BODY ................................................................. 87 5.1 Article XII:1 of the Marrakesh Agreement and Paragraph 1.2 of China's Accession Protocol ...........................................................................................