Next Generation of Export Restrictions: An Emergence of Raw Materials II Dispute?

Abstract

The proliferation of export restrictions on natural resources in a last decade has gained prominence in the international trade debate and has deepened an already existing wide divide between the North and the South in the context of the principle of permanent sovereignty over natural resources versus the beggar-thy-neighbor policy. Nevertheless, there is a conventional wisdom that the WTO disciplines dealing with export restrictions are weak. Some new WTO members, such as China, Mongolia, and Ukraine, were required, during their accession negotiations, to commit themselves to stricter rules, so called ‘WTO-plus’, by agreeing to phase out their export duties or to limit them to a designated number of tariff lines. Due to this additional legal uncertainties, the field of international trade law faces a greater challenges. However, until the China-Raw material I case the extent to which this would restrict their actual policy practices in this field had never been tested. In this regard, China-Raw materials and China-Rare earths, as defining case laws in this field, allow us to understand the legal boundaries of export restrictions under WTO law and determine the inconsistencies and gaps in the WTO law. This article evaluates the factual and evidentiary issues China may face in the emerging China-Raw Materials II dispute, in light of previous two cases, and identifies potential challenges that will impair China’s ability to prevail in Raw Materials II.