稀土sublimetext2

FRONTIERSOFLAWINCHINAVOL.
10JUNE2015NO.
2DOI10.
3868/s050-004-015-0013-5FOCUSCONFLICTANDBALANCEBETWEENENVIRONMENTALPROTECTIONANDTRADELIBERALIZATIONTHEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATTTOCHINA'SWTO-PLUSOBLIGATIONS—WTOPANELANDAPPELLATEBODYRULINGSONTHECHINESEEXPORTRESTRICTIONSOFRAREEARTHS,TUNGSTENANDMOLYBDENUMMarianPaschke*,SHICheng**OnMarch26,2014,apanel,establishedbytheWTODisputeSettlementBody,circulateditsfinalreportregardingtheChina—RareEarthscasetoWTOMembers.
ThisdisputeconcernsChina'sexportrestrictionsonrareearths,tungsten,andmolybdenum.
Initsreport,thepanelagreedwiththefindingsofanotherdispute,theChina—RawMaterialscase.
ItconcludedthattheenvironmentalexceptionsunderArticleXXGATT1994cannotbeappliedtoChina'sactions.
Thisconclusionisreconfirmedinthelatestappellatebody'sreportofChina—RareEarthsonAugust7,2014.
Therefore,ChinawasnotabletojustifytheviolationoftheirWTO-plusobligationtoeliminateallexportduties,containedinparagraph11.
3ofChina'sAccessionProtocol.
Asaconsequenceofthepanel'sdecision,itseemsimpossibleforChinatojustifytradebarrierswithenvironmentalinterestsandtoinvokeanyexceptions.
SuchfindingsaresubjecttoafundamentalcontroversywithintheWTOmultilateraltradesystem,tryingtosolvethetensionsbetweenenvironmentalprotectionandtradeliberalization.
Thisessayexaminesthegeneralapplicabilityofenvironmentalexceptionsbyanalyzingthepanel'sandappellatebody'sapproachestotheChina—RareEarthscaseandtheirfindings,inconnectionwiththepurposeofsustainabledevelopmentasprescribedbythepreambleoftheWTOAgreement.
Ithastobeexaminedwhetherthenon-applicationoftheWTOenvironmentalexceptionscomplieswithArticle31ViennaConventionontheLawofTreatiesandisconsistentwiththebalancebetweenthedifferentvaluespursuedbytheWTO.
ThisarticlearguesthatArticleXXGATT1994*MarianPaschke,ProfessorofLaw,atSchoolofLaw,UniversityofHamburg,Hamburg,Germany.
Contact:marian.
paschke@uni-hamburg.
de*(施珵)Ph.
Dcandidate,atSchoolofLaw,UniversityofHamburg,Hamburg,Germany.
Contact:cheng.
stella@live.
cn212FRONTIERSOFLAWINCHINA[Vol.
10:211shouldbeapplicabletoChina'sWTO-plusobligationspecifiedinparagraph11.
3ofitsAccessionProtocolasfarasenvironmentalinterestsareconcerned.
INTRODUCTION213I.
ENVIRONMENTALREGULATIONSUNDERTHEGATT1994.
214A.
ArticleXX(b)GATT1994.
215B.
ArticleXX(g)GATT1994.
216II.
CHINA'SWTO-PLUSOBLIGATIONTOELIMINATEEXPORTDUTIESPRESCRIBEDINPARAGRAPH11.
3OFTHEACCESSIONPROTOCOL218A.
China'sWTO-PlusObligationsinitsAccessionProtocol.
218B.
China'sWTO-PlusObligationtoEliminateExportDutiesunderParagraph11.
3oftheAccessionProtocol.
218III.
FINDINGSONTHEAPPLICABILITYOFARTICLEXXINTHECHINA—RAREEARTHSCASE220A.
BriefDescriptionoftheWTOCase:China—RareEarths.
220B.
ApplicabilityofArticleXXGatttoWTO-PlusObligationsinPanelReport.
.
.
.
.
2201.
TheAdoptedPanelandAppellateBodyReportsintheChina—RawMaterialsCase.
2212.
China'sArgumentsRelatingtotheApplicabilityofArticleXX221C.
FindingsofAppellateBodyAbouttheSystemicRelationshipBetweentheProvisionsofChina'sAccessionProtocolandtheGATT.
2251.
WithRespecttotheArticleXII:1oftheMarrakeshAgreement.
2252.
WithRespecttoParagraph1.
2ofChina'sAccessionProtocol2263.
RelationshipofChina'sAccessionProtocolwiththeMarrakeshAgreementandtheMultilateralTradeAgreementsAnnexedThereto.
227IV.
CRITIQUEONTHEFINDINGSINTHECHINA—RAREEARTHSDISPUTEABOUTTHEINAPPLICABILITYOFARTICLEXXGATTTOWTO-PLUSOBLIGATIONSUNDERPARAGRAPH11.
3OFTHEPROTOCOL228A.
WhethertheInterpretationIsAccurate.
2281.
CustomaryRulesofInterpretationinthePracticeoftheWTO.
2282.
TheAppliedApproachintheAppellateBodyReportandthePanelReport.
2303.
TheInterpretationaboutSystemicRelationshipbetweenParagraph11.
3oftheAccessionProtocolandtheGATT1994inPanelandAppellateBodyReports.
235B.
WhethertheFindingofPanelReportIsConsistentwiththeEnvironmentalProtectionInterestsContainedinthePreambleoftheWTOAgreement238V.
RECOMMENDATIONFORTHEINTERPRETATIONOFTHEAPPLICABILITYOFENVIRONMENTALROVISIONSOFTHEGATTTOWTO-PLUSOBLIGATIONS.
241CONCLUSION.
2432015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT213INTRODUCTIONRareearth,tungstenandmolybdenumareallessentialnaturalresources,especiallyforindustrialdevelopment.
Rareearthelementsarewidelyusedinagriculture,informationtechnologies,militarytechnologies,andcleanenergytechnologies.
1Theyare,forexample,componentsofbatteriesusedinelectroniccars.
Theyarealsocriticalfortheproductionoflaptopsandsmartphonesaswellasvitalcomponentsforaircraftandsatellites.
Therefore,rareearthmetalsareregardedas"industrialvitamins.
"2Chinaownsthebiggestresourcesofrareearthintheworld(whichisequivalenttoabout36%oftheworld'sknownreservesasat2009),andallofthe17knownrareearthelementscanbefoundonChineseterritory.
3Sincethelate1980's,Chinahasexportedrareearthinordertobuildupitseconomy.
TherareearthindustrydevelopedsorapidlythatsoonChinabecametheworld'slargestrareearthsupplier.
TodayChinasuppliesapproximately95%oftheglobaldemand.
4TheUS,JapanandtheEUaswellasotherindustrycountriesandregionsalldependonChina'srareearthexport.
However,theresourcesarelimited.
Inthe1980's,almost90%oftheworld'srareearthreserveswerelocatedinChina.
Todaythereareonly36%left.
5Chineseexpertsindicatethattheremainingreservescouldbeexhaustedinabout20years,iftheChinesegovernmentdoesnotcontroltheextractionandexport.
6Furthermore,theextractionandprocessingofrareearthcausessevereenvironmentaldamageandharmstheChinesepopulation,astheminingandprocessingproceduresarebothhighlyenergyconsumingandpolluting.
Inviewofthesefacts,theChinesegovernmenthastakennoticeofthenecessityofenvironmentalprotectionandresourcesconservationthatleadtoashiftintheirrareearthpolicy.
Eversincethelastdecade,Chinahasintroducedaseriesofmeasuresinordertoconserveresourcesandprotecttheenvironment.
7Exportrestrictionsonrareeartharepartofthemainimplementation.
Themaximumexporthasbeenmassivelyreducedandtheexportdutywasraisedfrom10%in2006to25%in2008,whichleadtoanincreaseinrareearthpricesandworldwideconcernsregardingthesecurityofglobalsupplies.
8Basedonthesecircumstances,theUS,Japan,andtheEUbroughttheChineseexportrestrictionsofrare1WANGJunzhi,中国稀土保卫战(RareEarthDefenseBattleofChina),ChinaEconomicPublishingHouse,at8(2011).
2Id.
3Id.
at15.
4USGeologicalSurvey,MineralCommoditySummaries,Jan.
2012,availableathttp://minerals.
usgs.
gov/inerals/pubs/commodity/rare_earths/mcs-2012-raree.
pdf(lastvisitedMay18,2014)5SeeWANG,fn.
1at29.
6LINChenyin&YANGZheng,商务部称中国稀土储备仅能维持20年可能需进口(MinistryofCommerceofthePeople'sRepublicofChinaClaimsChina'sRareEarthReserveWillBeUsedUpin20YearsandThereIsaPossibilityofImportation),availableathttp://news.
xinhuanet.
com/mil/2010-10/17/c_12668271.
htm(lastvisitedMay26,2014).
7J.
Korinek&J.
Kim,ExportRestrictionsonStrategicRawMaterialsandTheirImpactonTrade,OECDTradePolicyPapers,availableathttp://dx.
doi.
org/10.
1787/5kmh8pk441g8-en(lastvisitedMay30,2014).
8Id.
214FRONTIERSOFLAWINCHINA[Vol.
10:211earths,tungstenandmolybdenumtotheWTO'sattentiononMarch13,2012.
9ThepanelrefusedtoacceptChina'sargumentthatitsexportrestrictionswerejustifiedbyArticleXX(b)or(g)GATT1994andwerethereforenotabreachoftheWTO-plusobligationprescribedinparagraph11.
3oftheProtocolontheAccessionofthePeople'sRepublicofChina(hereafterChina'sAccessionProtocolortheProtocol).
Inthesubsequentappellatebody'sreport,10theopinionofChinarelatingtotheapplicabilityofparagraph11.
3isalsonotsupported.
ThesedecisionsmadeitimpossibleforChinatojustifyanymeasuresrelatingtorareearthexportdutiesandtoinvokeenvironmentalprovisions,althoughthepanelacknowledgedthattheminingandprocessingofrareearths,tungsten,andmolybdenumisseverelyharmfultotheenvironment.
Thiscasereflectstheconflictbetweenfreetradeandenvironmentalprotection.
China'srestrictionsontheexportofmineralresourcesisaccusedbyimportmembersoftheWTOtobetrade-distortingandinconsistentwiththeWTOregulations,whileChinaastheexportmemberoftheWTOexpectstojustifyitsmeasuresonthebasisofenvironmentalprotectionandtheconservationofexhaustiblenaturalresources.
Inviewofthis,thisarticlewilldevoteitsattentiontotheenvironmentalprotectionwithintheWTOframework.
Thisessayhasfiveparts.
ThefirstpartprovidesanoverviewofenvironmentalexceptionregulationsintheGATT1994.
ThesecondpartbrieflydescribesChina'sWTO-plusobligationsunderparagraph11.
3oftheProtocol.
ThethirdpartfocusesonthefindingsofthepanelreportandappellatebodyreportintheChina—RareEarthscasewithrespecttotheapplicabilityofArticleXXGATTtoChina'sWTO-plusobligationtoeliminateexportduties.
ThispartintroducesthebasicbackgroundofthisdisputeandthemainfindingsofthepanelreportandtheappellatebodyreportregardingtheapplicabilityofArticleXXGATT.
ThefourthpartcommentsonthefindingsfromtheperspectiveofinappropriatenessoftheappliedinterpretativeapproachandtheinconsistencywiththeWTOobjectiveofenvironmentalprotection.
Thefifthandlastpartthenapproachanalternativeholisticinterpretationofthematter,whichrequiresallrelevantelementstobeconsidered.
I.
ENVIRONMENTALREGULATIONSUNDERTHEGATT199411TheWTOallowsitsmemberstoadopttrade-restrictivemeasuresaimedatprotectingtheenvironmentwhenitsmembersfulfilspecificconditions.
InthepreambleoftheWTOAgreement,12membersrecognizethatpartoftheWTOistoallow"fortheoptimaluseoftheworld'sresourcesinaccordancewiththeobjectiveofsustainabledevelopment,seekingbothtoprotectandpreservetheenvironmentandtoenhancethemeansfordoing9SeePanelReport,China—MeasuresRelatedtotheExportationofRareEarths,TungstenandMolybdenum,WT/DS431/R,WT/DS432/R,WT/DS/433/R,Mar.
26,2014.
10SeeAppellateBodyReport,China—MeasuresRelatedtotheExportationofRareEarths,TungstenandMolybdenum,WT/DS431/AB/R,WT/DS432/AB/R,WT/DS/433/AB/R,Aug.
7,2014.
11GeneralAgreementonTariffsandTrade(GATT).
12MarrakeshAgreementEstablishingtheWorldTradeOrganization,Apr.
15,1994.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT215soinamannerconsistentwiththeirrespectiveneedsandconcernsatdifferentlevelsofeconomicdevelopment.
"13ThisexcerptshowsthatenvironmentalprotectionandsustainabledevelopmentarebothbasicaimsoftheWTO.
Furthermore,therearesomeregulationsthatdirectlyindicateenvironmentalprotectionsuchasArticleXX(b)and(g)GATT1994,Article2.
2TBT,Article2.
2SPSandArticleXIVGATS.
However,thisessaysolelydiscussestheregulationsundertheGATT1994withitsmainfocusonArticleXX,whichistheoneregulationthatisthemostconcernedwithenvironmentalprotection.
ThebasicprinciplesoftheGATT1994arenon-discriminationandfreetrade.
However,inordertobalancetheinterestsbetweenfreetradeandothervalues,suchassustainabledevelopmentandnationalsecurity,theGATTallowsWTOmemberstomakesomeexceptions.
InsomecircumstancesthememberscanuseArticleXXGATTtojustifymeasures,whichwouldotherwisebeinconsistentwiththeirGATTobligations.
Theseexceptionshelptobalancetheinternationalfreetradeandinterestsofnationalsovereignty.
14TheGATTregulationsrelatingtoenvironmentalprotectionareArticleXX(b)and(g)GATT,whichdealwithtwoaspectsofenvironmentalinterests—oneistheprotectionofhuman,animalandplantlifeorhealthandtheotheristheconservationofexhaustiblenaturalresources.
A.
ArticleXX(b)GATT1994ArticleXX(b)GATTallowsWTOmemberstotakenecessarymeasuresinordertoprotectthelifeorhealthofhumans,animals,andplants.
Inmostcasesrelatingtoenvironmentalprotection,suchasUS—Gasoline15,EC—Asbestos16,Brazil—RetreadedTyres17,thoseactionsweregenerallyacceptedbytheDisputeSettlementBodyoftheWTO.
ThisprovisionwascreatedduetoaproposalsubmittedbytheUSin1945duringaconferencewiththepurposetodraftaCharterforanInternationalTradeOrganization.
18Followingthis,ataconferenceinLakeSuccessin1947,thedelegateofBelgium-13WTOAgreement1994,firstrecitalinthepreamble.
14AnkeThiedemann,WTOundUmwelt—DieAuslegungdesArticleXXGATTinderPraxisderGATT/WTO-Streitbeilegungsorgane(WTOandtheEnvironment—TheInterpretationofArticleXXGATTinPractice,theGATT/WTODisputeSettlementOrgans),LITVERLAGMünster(Berlin),at8(2005).
15SeePanelReport,UnitedStates—StandardsforReformulatedandConventionalGasoline,WT/DS2/R,Jan.
20,1996.
16SeePanelReport,EuropeanCommunities—MeasuresAffectingAsbestosandProductsContainingAsbestos,WT/DS135/R,Sep.
18,2000.
17SeePanelReport,Brazil—MeasuresAffectingImportsofRetreadedTyres,WT/DS332/R,Jun.
12,2007.
18SeeU.
S.
DepartmentofStateBulletinVol.
XIII,No.
337,pointIIIG2,1945.
P.
924;seeThiedemann,fn.
14at15.
216FRONTIERSOFLAWINCHINA[Vol.
10:211Luxembourgtriedtointroducethecondition,correspondingdomesticsafeguardsundersimilarconditionsexistintheimportingcountriesandregions,19whichillustratesthedrafter'sconcernsovertheabuseofsanitaryregulationsbyimportingcountriesandregions.
20However,thisconditionwascancelledattheconferenceinGenevabecauseofitsredundancy.
21Intheearlystagesofthedraft,duringtheITOnegotiations,thepurposeofArticleXX(b)waslimitedtosanitaryrestrictions.
22However,inlightofthehistoricbackgroundsofthe1927Convention,23andotherbilateraltreaties24inwhichsimilarexceptionshadbeenextendedtoenvironmentalmeasures,allpartiesagreedthatexistingenvironmentaltreatiesandnationallawsshouldbecoveredbythoseregulations.
25Asaresult,theexceptionsareappliedtothesanitaryaswellasenvironmentalmeasures.
InordertojustifyanactionunderArticleXX(b)GATT,theactionhastobeexaminedintwosteps.
FirsttherequirementsofthespecificsectionofArticleXXGATT1994mustbeanalysed,andthentheactionsinquestionneedtobeassessedinaccordancewiththerequirementsoftheChapeauofArticleXXGATT1994.
26Therefore,tojustifyanactionunderArticleXX(b)GATT,thememberhastoarguethat:(1)themeasuresatissuearedesignedtoprotecthuman,animal,orplantlifeorhealth;(2)theGATTinconsistencyisnecessaryfortherealizationofthispolicyobjective.
Toassessthenecessityoftheactionstwopointsmustbetakenintoconsideration:thattheactionscanachievethedesiredlevelofprotectionandthattherearenoalternativeactionswhichwouldbeconsistentorlessinconsistentwiththeGATT1994;27and(3)theGATTinconsistentactionsmustbeappliedinconformitywiththerequirementsofthechapeauofArticleXX.
28B.
ArticleXX(g)GATT1994ArticleXX(g)belongstooneofthemostimportantprovisionsrelatingtoenvironmentalprotectionundertheGATT1994.
Itisusedtojustifyactionsthataretaken19SeeUN.
Doc.
E/PC/T/C.
6/41at3,availableatwww.
wto.
org/gatt_docs/English/SULPDF/90230090.
pdf(lastvisitedJun.
1,2014)20Seehttp://www.
wto.
org/english/res_e/booksp_e/gatt_ai_e/art20_e.
pdf,at569(lastvisitedJun.
1,2014)21SeeUN.
E/PC/T/A/PV/30,SecondSessionofthePreparatoryCommitteeoftheUnitedNationsConferenceonTradeandEmployment—VerbatimReport,availableathttp://www.
wto.
org/gatt_docs/English/SULPDF/90240163.
pdf(lastvisitedJun.
1,2014).
22SteveCharnovitz,ExploringtheEnvironmentalExceptionsinGATTArticleXX,25JournalofWorldTrade,11(1991).
23InternationalConventionfortheAbolitionofImportandExportProhibitionsandRestrictions,Nov.
8,1927.
24SeeCharnovitz,fn.
22at11.
25Id.
26SeeAppellateBodyReport,UnitedStates—StandardsforReformulatedandConventionalGasoline,WT/DS2/AB/R,Apr.
29,1996,at29.
27Seefn.
16,paragraph8.
204.
28JohnH.
Jackson,WilliamJ.
Davey&AlanO.
Sykes,LegalProblemsofInternationalEconomicRelations:Cases,MaterialsandText(5thedition),WestAcademicPublishing(SaintPaul),at592(2008).
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT217fortheconservationofexhaustiblenaturalresourcesifsuchmeasuresaremadeeffectiveinconjunctionwithrestrictionsondomesticproductionorconsumption.
ArticleXX(g)isfrequentlyappliedbythepanelorappellatebodywhenanalysingacasedealingwiththeprotectionofresources,suchastheUS—Gasoline29caseandtheUS—Shrimps30case.
ThisprovisionwasintroducedbytheUSinSeptember,1946,aspartofthe"suggestedcharterforaninternationaltradeorganization,"31andpromptedbyAmerica'sconcernsregardingthetradeofrawoil.
32TheprovisionwaskeptunchangedduringtheConferencesofLondonandLakeSuccess.
Later,duringaconferenceinGeneva,itwasalteredduetoarequestmadebytheBraziliandelegate.
Thedelegaterequestedthattheoriginaltext"takenpursuanttointernationalagreements"shouldbedeletedsincethedelegationhadtheintentiontoadoptconservationmeasuresinchapterVIIoftheActoftheUnitedNationsConferenceonTradeandEmployment.
33DuringtheITOnegotiations,theregulationwasdiscussedinthecontextofexportrestrictionsratherthanimportrestrictions.
34RawmaterialsormineralsaretypicalexamplesofnaturalresourcesthatfallundertheexceptionsofArticleXX(g).
Accordingtotheintentionsofthedrafters,theprovision'sapplicabilitydoesincludelivingresourcessuchasanimalsandplants.
35ThisconclusioncanalsobedrawnfromthefactthatattheconferenceofGeneva,thedelegationinitiallyagreedtothewording"relatesolelytotheconservationoffisheriesorwildlifeorotherexhaustiblenaturalresourcessuchasfisheriesorwildlife.
"36However,attheendofthatconference,thedelegationdecidedthatthesentencedealingwith"fisheriesorwildlife"shouldbedeletedsincethoseissueswerealreadycoveredbythesectiononexhaustiblenaturalresources.
37LikeArticleXX(b),ArticleXX(g)isalsosubjecttoamulti-levelanalysis.
InordertojustifyGATTinconsistentactionsunderArticleXX(g),ithastobeshownthat:(1)themeasuresatissueareconcernedwiththeconservationofexhaustiblenaturalresources;(2)themeasuresaidtheconservation;(3)themeasuresaremadeeffectiveinconjunction29Seefn.
15.
30SeePanelReport,UnitedStates—ImportProhibitionofCertainShrimpTypesandShrimpProducts,WT/DS58/R,May15,1998.
31Charnovitz,fn.
22at12.
Theoriginaltextis"relatingtotheconservationofexhaustiblenaturalresourcesifsuchmeasuresaretakenpursuanttointernationalagreementsoraremadeeffectiveinconjunctionwithrestrictionsondomesticproductionorconsumption.
"32Id.
at11.
33Seefn.
21.
34SeeCharnovitz,fn.
22at12.
35Id.
at14.
36SeeUN.
E/PC/T/147,SecondSessionofthePreparatoryCommitteeoftheUnitedNationsConferenceonTradeandEmployment—ReportofLegalDraftingCommitteeonChapterVII(Inter-GovernmentalCommodity[Arrangements]Agreements,at29.
37SeeUN.
E/PC/T/B/SR/27,SecondSessionofthePreparatoryCommitteeoftheUnitedNationsConferenceonTradeandEmployment,at14.
218FRONTIERSOFLAWINCHINA[Vol.
10:211withrestrictionsondomesticproductionordomesticconsumption;and(4)themeasuresareappliedinconformitywiththerequirementsofthechapeauofArticleXXGATT.
ArticleXX(b)and(g)GATTarethemostimportantprovisionsrelatingtoenvironmentalprotection.
TheyplayanessentialroleinWTOjurisprudencewhenfacedwithconflictsbetweenenvironmentalinterestsandtradeliberalization.
InrecentWTOcases,Chinatriedtojustifyitsexportrestrictionsonrareearth,tungstenandmolybdenuminaccordancewiththesefindingsbymeansoftheGATTregulations.
However,thepanelandtheappellatebodyrejectedtheapplicabilityofthesetwoprovisionstoChina'sWTO-plusobligationunderparagraph11.
3oftheAccessionProtocol.
II.
CHINA'SWTO-PLUSOBLIGATIONTOELIMINATEEXPORTDUTIESPRESCRIBEDINPARAGRAPH11.
3OFTHEACCESSIONPROTOCOLA.
China'sWTO-PlusObligationsinItsAccessionProtocolTheWTO-plusobligationsarecommitmentsthatexceedthealreadyexistingrequirementsoftheWTOAgreement.
AsArticleXII:1MarrakeshAgreementstates,"[a]nyStateorseparatecustomsterritorypossessingfullautonomyintheconductofitsexternalcommercialrelationsandoftheothermattersprovidedforinthisagreementandthemultilateraltradeagreementsmayaccedetothisagreement,ontermstobeagreedbetweenitandtheWTO.
"38Therefore,theWTO-plusoptionprovidesalegalbasisfortheWTOandaccedingmemberstoagreeovertermsthataredeviantfromtheexistingWTOrulesorobligations.
39TheWTO-plusobligationsundertakenbyChinaareextensive,rangingfromtheadministrationofChina'straderegimetoitseconomicsystemandWTOdisciplinesoninvestment.
40TheseobligationsaremainlyestablishedinChina'sAccessionProtocolwithcross-referencetotheReportoftheWorkingPartyontheAccessionofChina.
TheAccessionProtocolcontainsalargenumberofcommitmentsthataltertheWTOrulesandobligations.
Therefore,itispossiblethatarevisedWTO-plusobligationinaccordancewithChina'sAccessionProtocolmaybeappliedwhenChinaisconfrontedwithinternationaltradedisputes.
B.
China'sWTO-PlusObligationtoEliminateExportDutiesunderParagraph11.
3oftheAccessionProtocolIngeneral,theWTOmultilateraltradeagreementsdonotforbidWTOmembersfromimposingexportdutiesonanyproducts—ArticleII:1(b)GATTonlyreferstotheimporttariffswhichshallnotbeinexcessoftheratesfixedbyeachstateinitsown38SeeArticleXII:1oftheMarrakeshAgreementEstablishingtheWorldTradeOrganization.
39JuliaYaQin,"WTO-Plus"ObligationsandTheirImplicationsfortheWorldTradeOrganizationLegalSystem:AnAppraisaloftheChinaAccessionProtocol,37JournalofWorldTrade,487(2003).
40Id.
at483.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT219scheduleannexedtotheGATT,unlesstheappliedexportdutyissohighthatitamountstoadefactoexportquota,whichisprohibitedpursuanttoArticleXIGATT.
41However,ChinahasacceptedtheobligationtoeliminateallexportdutiesinitsAccessionProtocol,whichisaWTO-plusobligationthatexceedstherequirementsoftheWTOAgreement.
Asparagraph11.
3ofChina'sAccessionProtocolstates,"ChinashalleliminatealltaxesandchargesappliedtoexportsunlessspecificallyprovidedforinAnnex6ofthisProtocolorappliedinconformitywiththeprovisionsofArticleVIIIGATT.
"42Annex6oftheProtocollistseighty-fourproducts—mostofwhicharerawmaterials—thatcanbesubjecttoexportduties.
EachproductcannotexceedthemaximumexportdutyratethatChinahasfixedinitsProtocol.
ArticleVIIIGATTdealswithfeesandchargesotherthanimportorexportduties,whichmustbelimitedtotheapproximatecostofservicesrendered.
TheWTO-plusobligationcreatedbyChina'sAccessionProtocolresultsinacomplexlegalproblemthatistryingtosolvetherelationshipbetweenaccessionprotocolsandtheWTOAgreement,includingtheMarrakeshAgreementanditsannexedmultilateraltradeagreements.
AlthoughChina'sAccessionProtocolclearlystatesthattheProtocolis"anintegralpartoftheWTOAgreement,"43itdoesnotclearlyindicatetherelationshipbetweenaWTO-plusprovisionandthegenerallyapplicablemultilateraltradedisciplinessuchasthegeneralexceptionsunderArticleXXGATT.
44ThisissueisillustratedintheChina—RareEarthsdispute.
InChina—RareEarths,Chinahasimposedexportdutiesonrareearth,molybdenum,andtungsten,whichviolatesitsobligationunderparagraph11.
3oftheProtocol.
Sinceminingandprocessingofrareeartharegreatlyharmfultotheenvironment,ChinaintendedtoinvokeenvironmentalexemptionsunderArticleXXGATTtojustifyitsactions.
Giventhattheobligationunderparagraph11.
3oftheAccessionProtocolisadeviationfromthegeneralWTOAgreementthatcanaffectthepossibilitytojustifyaninconsistentmeasurebymeansofthegeneralexceptionsunderArticleXXGATT,45thegeneralapplicabilityofArticleXXGATTplaysasignificantroleintheChina—RareEarthsdispute.
ThenextsectionaddressesthefindingsofthepanelandtheappellatebodyinChina—RareEarthsregardingtheapplicabilityofenvironmentalexceptionstoChina'sWTO-plusobligationunderparagraph11.
3oftheProtocol.
41MitsuoMatsushita,ExportControlofNaturalResources—WTOPanelRulingontheChineseExportRestrictionsofNaturalResources,3Trade,LawandDevelopment,273(2011).
42Paragraph11.
3oftheProtocolontheAccessionofthePeople'sRepublicofChina.
43Paragraph1.
2ofAccessionProtocolstates:"ThisProtocol,whichshallincludethecommitmentsreferredtoinparagraph342oftheWorkingPartyReport,shallbeanintegralpartoftheWTOAgreement.
"44JuliaYaQin,ThePredicamentofChina's"WTO-Plus"ObligationtoEliminateExportDuties:ACommentaryontheChina-RawMaterialsCase,11ChineseJournalofInternationalLaw237,(2012).
45ThomasH.
Au,ReconcilingWTOGeneralExceptionswithChina'sAccessionProtocol,5TsinghuaChinaLawReview95,100(2013).
220FRONTIERSOFLAWINCHINA[Vol.
10:211III.
FINDINGSONTHEAPPLICABILITYOFARTICLEXXINTHECHINA—RAREEARTHSCASEA.
BriefDescriptionoftheWTOCase:China—RareEarthsIntheChina—RareEarthscase,thecomplainingpartieswereoftheopinionthatChina'sexportrestrictionsofrareearth,tungstenandmolybdenumwereabreachofChina'sWTOobligations.
ThepartiesarguedthattheimpositionofexportdutiesviolatedtheChinesecommitmentsunderparagraph11.
3oftheAccessionProtocolandthattheimpositionofexportquotaswasinconsistentwithArticleXI:1GATT1994.
Inviewoftheseaccusations,ChinaresortedtotheenvironmentalregulationsArticleXX(b)and(g)GATT—asgeneralexceptionstojustifyitsWTOinconsistentexportrestrictions.
Regardingexportquotas,ChinadirectlyresortedtoArticleXX(g)GATTtojustifyitsmeasures.
Regardingtheexportduties,Chinaarguedthatitscommitmentunderparagraph11.
3oftheProtocolissubjecttoArticleXXGATTandthatthedisputedexportdutiesonrareearth,tungstenandmolybdenumarethereforejustifiesunderArticleXX(b)GATT.
However,bothofthepanelandappellatebodyrejectedthejustificationbyArticleXX(b)and(g)GATTandfoundthatChina'sactionswereagainstWTOregulations.
OnereasonwasthattheChinesegovernmentdidnotprovethatitsmeasuresmettherequirementsofArticleXX(g)andArticleXX(b).
TherequirementswereexplainedbythepanelinaccordancewiththegeneralrulesofinterpretationcontainedinArticle31ViennaConventionontheLawofTreaties(hereafterViennaConvention).
ThesecondreasonwasthattheapplicabilityofArticleXXtoparagraph11.
3ofChina'sAccessionProtocolisrejectedbybothoftheappellatebodyandthepanel.
B.
ApplicabilityofArticleXXGATTtoWTO-PlusObligationsinPanelReportAccordingtoparagraph11.
3oftheAccessionProtocolChinaisobligatedto"eliminatealltaxesandchargesappliedtoexportsunlessspecificallyprovidedforinAnnex6ofthisProtocolorappliedinconformitywiththeprovisionsofArticleVIIIoftheGATT1994.
"46ThisobligationtoeliminateexportdutiesisatypicalWTO-plusobligation,becausetheWTOitselfdoesnotprohibittheimposingofexportduties.
AfterthepanelconfirmedthatChina'sexportdutieswereinconsistentwithitscommitmentsunderparagraph11.
3oftheAccessionProtocol,ChinatriedtoresorttoArticleXX(b)GATTtojustifyitsactions.
However,theapplicabilityofArticleXX(b)GATTtoChina'sWTO-plusobligationwasrejectedinspiteoftherecognizedenvironmentaldamagecausedbyminingandprocessingofrareearth,tungstenandmolybdenum.
4746Seefn.
42.
47SeePanelReport,China—RareEarths,WT/DS431/DS432/DS433/R,paragraph7.
150.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT2211.
TheAdoptedPanelandAppellateBodyReportsintheChina—RawMaterialsCase.
48—ThepanelintheChina—RareEarthscaseobservedthatthepanel'sreportoftheChina—RawMaterialscasestatedthatthereisnoreferencetotheGATT1994inparagraph11.
3ofChina'sAccessionProtocol.
Therefore,thepanelandappellatebodyofChina—RawMaterialshadconcludedthat"thereisnobasisinChina'sAccessionProtocoltoallowtheapplicationofArticleXXGATTtoChina'sobligationsinparagraph11.
3oftheAccessionProtocol.
"49BasedonthisconclusionmadeinChina—RawMaterials,thepanelofChina—RareEarthswasoftheopinionthatinaccordancewithArticle17.
14DSUtheearlieroutcomesshouldbeadopted.
50InadditiontoArticle17.
14,Article3.
2DSU51statesthatsecurityandpredictabilityareverycrucialtothemultilateraltradingsystem.
Thereforeitisnecessarytoobeypreviousadjudicationsinordertoavoidcontradictorydecisionsinsimilarcases.
Asaresultthepanelactedwithgreatreluctancewhenaskedtore-examinationtheapplicabilityofArticleXXinconsiderationofChina'sarguments.
52However,afterconsideringthefollowingfourpoints:(1)thatChinahadproposednewargument,(2)thatnootherpartyrejectedtothere-examination,(3)thatthepartiestothisdisputearedifferentfromthepartiesinChina—RawMaterialsand(4)finallythefundamentalsystemicimportanceoftheapplicabilityofArticleXXinthepresentcase,53thepaneldecidedtore-examinetheapplicabilityofArticleXXtoparagraph11.
3oftheAccessionProtocol54butlimitedthere-examinationtothespecificargumentsthatwerepresentedbyChinainsteadofadenovodetermination.
55ThepanelpointedoutthatonlyifChina'sargumentscouldberegardedas"cogentreason"todeviatefromthefindingsinChina—RawMaterialsitmightreversethepreviousstatements.
562.
China'sArgumentsRelatingtotheApplicabilityofArticleXX.
—Inordertoprovethatparagraph11.
3oftheProtocolissubjectedtoArticleXXGATTChinabroughtfourargumentstothepanel:(1)Interpretationofomissionsinthecoveredagreements.
Inthisregard,Chinaarguedthatalthoughparagraph11.
3oftheAccessionProtocolholdsnoactualreferencetoArticleXXGATT,thisinitselfdoesnotexcludethe48SeeAppellateBodyReport,China—MeasuresRelatedtotheExportationofVariousRawMaterials,WT/DS394/DS395/DS398/R,WT/DS394/DS395/DS398/AB/R.
49SeePanelReport,China—RawMaterials,paragraph7.
159;AppellateBodyReport,China—RawMaterials,paragraph307.
50Seefn.
47,paragraph7.
55.
51UnderstandingonRulesandProceduresGoverningtheSettlementofDisputes.
52Seefn.
47,paragraph7.
54.
53Id.
paragraph7.
59.
54Id.
paragraph7.
60.
55Id.
56Id.
paragraph7.
61.
222FRONTIERSOFLAWINCHINA[Vol.
10:211applicabilityofArticleXXGATT.
57ChinaalsoquotedtheopinionoftheappellatebodyinUS—CarbonSteel,whichstatedthat"suchsilencedoesnotexcludethepossibilitythattherequirementwasintendedtobeincludedbyimplication.
"58Inviewofthis,thepanelanalysedtheappellatebody'sfindingsinUS—CarbonSteelandcametotheconclusionthattheappellatebody'sopinionsinChina—RawMaterialsandUS—CarbonSteelwerecomparable.
Theappellatebodiesofbothcasesweredecidingoversimilarissues.
IntheUS—CarbonSteelcase,thebodyhadtodecidewhetherthedeminimisstandardinArticle11.
9SCMAgreementwasapplicabletoArticle21.
3SCMAgreement.
China—RawMaterialsdealtwiththeapplicabilityofArticleXXGATTtoparagraph11.
3ofChina'sAccessionProtocol.
59Inbothcases,theagreementsheldnocrossreferencestooneanotherandtheappellatebodythereforedeniedtheapplicability.
60Alsoinbothcases,theanalysisbeganwithagrammaticalinterpretationoftheagreements.
61Duringtheanalysis,theappellatebodyofbothcasesdrewonthetechniqueofcross-referencing.
InUS—CarbonSteel,theappellatebodywasoftheopinionthatthefrequentuseofcross-referencessuggestedthatthenegotiatoroftheSCMAgreementwouldhaveexpresslycross-referencedarequirementthatwastobeappliedtooneprovisionbutregulatedinanothercontext.
62InChina—RawMaterials,asimilarsituationexisted.
Furthermore,bothcasesreferredtothe"immediatelyadjacentparagraphs"withinthesamearticleastheparagraphatissueasabasisforinterpretation.
Finally,bothcasestriedtoexplainwhytheprioritisationofWTOrightsandobligationscannotprovideguidanceontheinterpretationatissue.
63Basedontheabovereasoning,thepanelconcludedthatChina'sargumentregardingomissionsinaprovisionwasnotpersuasiveandthereforenocogentreasontoreversetheappellatebody'sfindingsregardingtheapplicabilityofArticleXXGATTtoparagraph11.
3oftheAccessionProtocol.
64(2)SystemicrelationshipBetweentheprovisionsofChina'sAccessionProtocolandtheGATT.
AnewargumentpresentedbyChinawasthat,duetothetextualbasisofparagraph1.
2oftheAccessionProtocolandArticleXII:1MarrakeshAgreement,paragraph11.
3oftheAccessionProtocolisanintegralpartoftheGATT1994.
65Accordingly,Article57Id.
paragraph7.
63.
58Id.
paragraph7.
65.
59Id.
paragraph7.
67.
60Id.
61Id.
paragraph7.
68.
62Id.
paragraph7.
69.
63Id.
paragraph7.
71.
64Id.
paragraph7.
72.
65Id.
paragraph7.
75.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT223XXGATTshouldbeapplicabletoparagraph11.
3oftheAccessionProtocol.
However,thepanelalsorejectsthisargumentforthefollowingreasons:(i)Withrespecttoparagraph1.
2ofChina'sAccessionProtocol.
ThepaneldisagreedwithChina'sargumentthattheterm"WTOAgreement"containedinparagraph1.
2oftheAccessionProtocolismeanttoincludetheMarrakeshAgreementandthemultilateraltradeagreementsannexedthereto.
Thepaneltookinfacttheoppositeviewthattheterm"WTOAgreement"onlyreferstotheMarrakeshAgreementitself.
66Basedontheliteralmeaningofthewordsusedinparagraph1.
2,thepanelfoundnoimplicationthat"individualprovisionsoftheAccessionProtocolareintegralpartsofdifferentmultilateraltradeagreementsannexedtotheMarrakeshAgreement.
"67FromthewordingthepanelcouldonlydeducethatChina'sAccessionProtocol"asawhole"isanintegralpartoftheMarrakeshAgreement.
68Accordingtoparagraph1ofGATT1994,theconstitutionoftheGATT1994providesanexhaustivelist.
Pursuanttoparagraph1(b)(ii),theprotocolsofaccessionthat"haveenteredintoforceundertheGATT1947beforethedateofeffectivenessoftheWTOAgreement"couldberegardedasanintegralpartoftheGATT1994.
69However,China'sAccessionProtocolwasnotinconsistencewiththerequirementscontainedinparagraph1andshouldthereforebeexcludedfromtheconstitutionoftheGATT1994.
Thepanelwasoftheopinionthatfromthewordingofparagraph1,PartIIoftheAccessionProtocolinconnectionwithArticleII:7GATT1994,itcouldonlybeinferredthat"theschedulesannexedtothisprotocol—notincludingparagraph11.
3oftheProtocol—areanintegralpartoftheGATT1994.
"70Withreferencetopastexperiencesofpreviouscases,thepanelconcludedthatthefunctionofparagraph1.
2oftheAccessionProtocolconsistsoftwoaspects:"OneistomakesuretheobligationsunderChina'sAccessionProtocolwereenforceableundertheDSUandtheotheristoensurethatthecorrespondinginterpretationcomplieswiththecustomaryrulesoftheinterpretationofpublicinternationallaw.
"71Asaconsequence,thepanelfoundthatseeingtheWTOAgreementasareferencetotheMarrakeshAgreementalreadyfulfilbothfunctions.
72Accordingly,thepanelstatedthatChina'sinterpretationofparagraph1.
2oftheProtocoldepartedfromthepracticeoftheearlierpanel'sandappellatebody'sreports.
7366Id.
paragraph7.
80.
67Id.
paragraph7.
82.
68Id.
69Id.
paragraph7.
83.
70Id.
paragraph7.
84.
71Id.
paragraph7.
85.
72Id.
73Id.
224FRONTIERSOFLAWINCHINA[Vol.
10:211ThepanelfoundthatitwouldberedundanttomakeexplicittextualreferencetotheexceptionalapplicationoftheGATT,suchasparagraph5.
1oftheAccessionProtocol,ifitagreedwithChina'sargumentthatArticleXXcouldbeappliedtotheWTOcommitmentsoftheAccessionProtocol.
74Basedonthereasoningabove,thepanelcametotheconclusionthatonlyChina'sAccessionProtocolasawholeisanintegralpartoftheMarrakeshAgreementbutnotitsindividualprovisionsassuch.
(ii)WithrespecttoArticleXII:1oftheMarrakeshAgreement.
ChinaarguedthatArticleII:1MarrakeshAgreementshowedthattheAccessionProtocolwasanintegralpartoftheGATT1994becauseofitsintrinsicrelationshipanditsfunctionto"servetospecify"China'sobligationsundertheWTOAgreementandthemultilateraltradeagreementsannexedthereto.
However,thepanelfoundnothingtosupportChina'sopinion.
Inthepanel'sopinion,thetextofArticleXII:1MarrakeshAgreementcontainednoinformationthatwouldsupportChina'sassertionthatindividualprotocolprovisionsshouldbeconsideredasanintegralpartoftheWTOAgreement.
75Moreover,thescopeofthecommitmentsintheAccessionProtocolexceedsthescopeoftheobligationsspecifiedintheWTOAgreementandothermultilateraltradeagreementsannexedthereof.
76ThepanelhaddoubtsaboutChina'sarguments.
TheconsequenceoffollowingChina'sreasoningwouldhavebeenthatmanyothermultilateralagreements,referringtotheGATTas"servingtospecify"theobligations,wouldautomaticallyberegardedasanintegralpartoftheGATT1994,includingtheAnti-DumpingAgreement,theCustomsValuationAgreementaswellastheSCMAgreement.
However,itisrecognisedthatthoseagreementsareinfactnotanintegralpartoftheGATT.
77Inviewoftheabovereasoning,thepanelrejectedChina'sargumentregardingArticleXII:1MarrakeshAgreement.
78(3)"NothinginthisAgreement"inArticleXXGATT1994.
Chinaarguedthatthephrase"nothinginthisagreement,"containedinthechapeauofArticleXXGATTimpliesthattheprovisionisapplicabletoparagraph11.
3oftheAccessionProtocol.
InChina'sopinion,theterm"thisagreement"referstotheGATT1994which,basedonChina'searlierreasoning,includestheAccessionProtocolasanintegralpartoftheGATT1994.
Therefore,ArticleXXhadtobeapplicabletoparagraph11.
3oftheProtocol.
However,thepanelnotedthatithadnotacceptedChina'sargumentthattheAccessionProtocolwasanintegralpartoftheGATT.
AsaconsequencethepanelalsorejectedthispartofChina'sreasoning.
74Id.
paragraph7.
86.
75Id.
paragraph7.
91.
76Id.
77Id.
paragraph7.
92.
78Id.
paragraph7.
93.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT225(4)ObjectandpurposeoftheWTOAgreement.
ChinaarguedthatfromtheperspectiveoftheWTOAgreement'sobjectandpurpose,anapplicabilityofArticleXXtoparagraph11.
3oftheProtocolneededtobeconfirmed,sinceanon-applicabilityofArticleXXwouldimplythattheWTOforcedmembertoendureenvironmentaldisasterinordertorealizetradeliberalization.
79Thisargumentwasalsonotaccepted.
Accordingtothepanel,Chinahadmadeitsargumentonthefalsepremisethat"tradeliberalizationmustbepromotedatwhatevercost.
"80However,thepanelwasconvincedthatparagraph11.
3oftheAccessionProtocolinfactonlyconcernedonekindofinstrument—exportduties81.
ThismeantthatChinamaytakemeasuresotherthanexportdutiestoprotecttheenvironmentandhumanhealth,unlesstheycouldprovethatexportdutiesweretheonlyinstrumentadequatetoprotecttheenvironmentandexhaustiblenaturalresources.
82InsumandbasedontheabovereasoningthepaneldeniedtheapplicabilityofArticleXXGATTtoparagraph11.
3ofChina'sAccessionProtocol.
C.
FindingsofAppellateBodyabouttheSystemicRelationshipBetweentheProvisionsofChina'sAccessionProtocolandtheGATTAsrequestedbyChina,withrespecttothequestionoftheapplicabilityofArticleXXGATTtoparagraph11.
3ofChina'sAccessionProtocol,theappellatebodyhasonlyexaminedtheChineseargumentrelatingtothesystemicrelationshipbetweentheprovisionsofChina'sProtocolandtheGATT.
Basedonitsanalysis,theAppellateBodyconcludedthatparagraph1.
2ofChina'sAccessionProtocolandArticleXII:1ofMarrakeshAgreementcouldnotprovethataspecificprovisioninChina'sProtocolisanintegralpartofoneoftheMultilateralTradeAgreementsattachedtotheMarrakeshAgreement.
83ThereasonsoftheAppellateBodyareasthefollowing:1.
WithRespecttotheArticleXII:1oftheMarrakeshAgreement.
—Beforetheappellatebody,ChinaarguedthatArticleXII:1oftheMarrakeshAgreementservedtospecifyitsrightsandobligationsundertheMarrakeshAgreementandthemultilateraltradeagreementsannexedthereto.
However,likethepanel,theappellatebodyalsorejectedthisargument.
TheappellatebodymadeitsanalysisstartingfromtheinterpretationofArticleXII:1oftheMarrakeshAgreement.
Accordingtotheappellatebody,thisprovisionsetsoutthegeneralruleofanaccedingMemberjoiningintotheWTO.
ItsfirstsentenceprovidesalegalbasisthattheaccedingMembermayaccedetotheMarrakeshAgreement"onterms79Id.
paragraph7.
105.
80Id.
paragraph7.
105.
81Id.
paragraph7.
112.
82Id.
paragraph7.
113.
83Seefn.
47,paragraph5.
73.
226FRONTIERSOFLAWINCHINA[Vol.
10:211tobeagreed"withtheWTO.
84ItssecondsentenceindicatesthattheaccedingMembershallbesubjecttotherightsandobligationsin"theentiretyoftheMarrakeshAgreementandtheMultilateralTradedAgreementsannexedthereto.
"85Basedontheinterpretation,theappellatebodyfoundnotextualbasistosupportChina'sargument.
Accordingly,theappellatebodyalsosawnothinginthisprovisionthatrelatestothequestionofthespecificrelationshipbetweenindividualprovisionsofanaccessionprotocolandtheMarrakeshAgreementoranyoneoftheMultilateralTradeAgreementsattachedthereto.
862.
WithRespecttoParagraph1.
2ofChina'sAccessionProtocol.
—Chinaalsoreferredtoparagraph1.
2ofitsAccessionProtocoltosupportitsopinionthatindividualprovisionsofChina'sAccessionProtocolisanintegralpartoftheMarrakeshAgreementoroneoftheMultilateralTradeAgreementstowhichitintrinsicallyrelates.
87However,thisargumentisalsonotacceptedbytheappellatebody.
Firstofall,theappellatebodymadetheexplanationaboutthetermof"theWTOAgreement.
"Theanalysiswasmadebasedonthecontextsofthisprovision—i.
e.
paragraphs1.
2,881.
1,89and1.
390ofChina'sAccessionProtocolaswellastheDecisionoftheMinisterialConferenceofNovember10,200191.
Theappellatebodywasoftheopinionthattheterm"theWTOAgreement"mayonlyrefertotheMarrakeshAgreementbyreadingtheabovecontextsofparagraph1.
2ofChina'sAccessionProtocol;92However,theappellatebodyalsoindicatedthatthistermdoesnotnecessarilyprecludetheMultilateralTradeAgreementsattachedtotheMarrakeshAgreementifanexaminationwasmadebasedonthewholeChina'sAccessionProtocol.
93Therefore,intheviewoftheappellatebody,thescopeoftheterm"theWTOAgreement"mayvarydependingonthedifferentcontexts.
ThisconclusionisdifferentfromtheopinionofthepanelinChina—RareEarths,inwhichtheterm"theWTOAgreement"onlyreferstotheMarrakeshAgreement.
Althoughinthisrespecttheappellatebodydidnotsupporttheopinionofthepanel,ChinastillhasnotreceivedsupportfromtheappellatebodyrelatingtothequestionofthespecificrelationshipbetweenindividualprovisionsofChina'sAccessionProtocolandtheindividualprovisionsoftheMarrakeshAgreementandtheattachedMultilateralTradeAgreementsbasedonparagraph1.
2ofChina'sAccessionProtocol.
Accordingtothe84Id.
paragraph5.
27.
85Id.
paragraph5.
28.
86Id.
paragraph5.
3487Id.
88Id.
paragraph5.
42.
89Id.
paragraph5.
43.
90Id.
paragraph5.
44.
91Id.
paragraph5.
45.
92Id.
paragraph5.
46.
93Id.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT227appellatebody,thescopeoftheterm"theWTOAgreement"playsnorolewithrespectofthelegaleffectofparagraph1.
2ofChina'sAccessionProtocol.
94Infact,accordingtotheappellatebody,thisprovisionseversonlyabridgefunction,thatis,itindicatesthatChina'sAccessionProtocolisintegratedintothesinglepackageofWTOrightsandobligations.
TogetherwithArticleII:2oftheMarrakeshAgreement,theseprovisionsbothshowthattheMarrakeshAgreement,theMultilateralTradeAgreementsattachedthereto,andChina'sAccessionProtocolmakeupthesinglepackageofrightsandobligationswhichChinaneedtoabidebyintheframeworkoftheWTO.
95Therefore,therelationshipbetweentheindividualprovisionsoftheProtocolandtheindividualprovisionsoftheMarrakeshAgreementandtheattachedMultilateralTradeAgreementsisnotrevealedbyparagraph1.
2ofChina'sAccessionProtocol.
963.
RelationshipofChina'sAccessionProtocolwiththeMarrakeshAgreementandtheMultilateralTradeAgreementsAnnexedThereto.
—Theappellatebodyheldtheopinionthatthesoleparagraph,suchasparagraph1.
2ofChina'sAccessionProtocolorArticleXII:1oftheMarrakeshAgreement,cannotresolvetheproblemoftherelationshipbetweeneachprovisionoftheProtocol,ononehand,andtheindividualprovisionofMarrakeshAgreementandtheMultilateralTradeAgreementsannexedthereto,ontheother.
Theresolutionshallbemadeonacase-by-casebasisthroughathoroughanalysisintheeventoflackingexpressreferenceaccordingtotheappellatebody.
97Thatis,theanalysismustbemade"onabasisofthecustomaryrulesoftreatyinterpretationandthecircumstancesofthedispute,takingintoaccountnotonlythetextoftheprovisionatissue,butalsoitscontextandtheoverallarchitectureoftheWTOsystemasasinglepackageofrightsandobligationsandotherrelevantelements.
"98Initsanalysis,theappellatebodyhasinvokedtwocasesintheframeworkoftheWTO—China—PublicationsandAudiovisualProducts99andChina—RawMaterials100—toprovethatathoroughanalysistodeterminethespecificrelationshipbetweenanindividualprovisioninChina'sAccessionProtocol,ononehandandprovisionsoftheMarrakeshAgreementandthemultilateralTradeAgreements,ontheother,hasalreadyappliedbytheWTOpractices.
101Insumandbasedontheabovereasoning,theappellatebodydeniedthatparagraph1.
2ofChina'sAccessionProtocolandArticleXII:1oftheMarrakeshAgreementcould94Id.
paragraph5.
48.
95Id.
paragraph5.
49.
96Id.
paragraph5.
50.
97Id.
paragraph5.
57.
98Id.
paragraph5.
62,paragraph5.
68,paragraph5.
74.
99SeeAppellateBodyReport,China—MeasuresAffectingTradingRightsandDistributionServicesforCertainPublicationsandAudiovisualEntertainmentProducts,WT/DS363/AB/R,Dec.
21,2009.
100Seefn.
48.
101Seefn.
47,paragraph5.
60,paragraph5.
63.
228FRONTIERSOFLAWINCHINA[Vol.
10:211explainthesystemicrelationshipbetweenparagraph11.
3oftheprotocolandArticleXXofGATT1994.
Fortheappellatebody,thesystemicrelationshipshouldbemadethroughathoroughanalysisonacase-to-casebasis.
Therefore,theChineseargumentsarerejectedandaccordingly,theapplicabilityofArticleXXGATTtoparagraph11.
3ofChina'sAccessionProtocolisalsonotsupportedbytheappellatebody.
IV.
CRITIQUEONTHEFINDINGSINTHECHINA—RAREEARTHSDISPUTEABOUTTHEINAPPLICABILITYOFARTICLEXXGATTTOWTO-PLUSOBLIGATIONSUNDERPARAGRAPH11.
3OFTHEPROTOCOLAsstatedabove,theWTOjurisprudenceconcludedthattheenvironmentalprotectionexceptionsunderArticleXXGATTcouldnotbeappliedtojustifyChina'sexportdutiesthatviolateditscommitmentsunderparagraph11.
3oftheAccessionProtocol.
Thequestionis,whetherthefindingsareaccurate.
A.
WhethertheInterpretationIsAccurateInthecaseofChina—RareEarths,theapplicabilityofArticleXXtotheWTO-plusobligationisthemostimportantissue.
BydecidingwhetherArticleXXisapplicableornot,theappliedinterpretationapproachplaysacrucialrole.
Therefore,itisnecessarytoanalysewhethertheappliedinterpretationapproachisaccurate.
Inthepresentcase,boththepanelandtheappellatebodyhavestatedthattheanalysisoftheproblemofapplicabilityofArticleXXtoChina'sWTO-plusobligationisresortedtothecustomaryrulesofinterpretation.
102Especiallytheappellatebodystressedmanytimeinitsreportthattheinterpretationisbasedonathoroughanalysis.
Inlightofthis,inordertoanalyzewhethertheappliedinterpretationisaccurate,itneedstocastaglanceattheinterpretationapproachinthepracticeoftheWTO.
1.
CustomaryRulesofInterpretationinthePracticeoftheWTO.
—IntheframeworkoftheWTO,themostimportantprovisionrelatingtointerpretationisArticle3.
2DSU.
Basedonthisprovision,thecustomaryrulesofinterpretationofpublicinternationallawisconsideredasthefoundationoftheinterpretationactivitiesoftheWTOjurisprudence.
103Astotheunderstandingofthecustomaryrulesofinterpretationofpublicinternationallaw,accordingtotheGATT/WTOpracticeandtheprevailingviewintheinternationalcommunity,Articles31to32ViennaConvention104embodiesthose102Seefn.
47,paragraph7.
55;AppellateBodyReport,China—RareEarths,WT/DS431/DS432/DS433/AB/R,paragraph5.
57,paragraph5.
62,paragraph5.
68.
103Schollendorf,DieAuslegungvlkerrechtlicherVertrgeinderSpruchpraxisderAppellateBodyderWelthandelsorganisation(TheInterpretationofTreatiesintheCaseLawoftheAppellateBodyoftheWorldTradeOrganization),Duncker&Humblot(Berlin),at153(2005).
104ViennaConventionontheLawoftheTreaties,May23,1969.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT229rulesofinterpretation.
105InthecaseofUS—Gasoline,106theappellatebodyexpresseditsopinionthatArticle31(1)oftheViennaConventionhasobtainedthestatusofaruleofcustomaryorgeneralinternationallawandtherefore,itformsthecustomaryrulesofinterpretationofpublicinternationallaw.
107InthesequentcaseofJapan—AlcoholicBeveragesII,108theappellatebodyextendedthescopeofthecustomaryrulesofinterpretationandemphasizedthatArticle31asawholetogetherwithArticle32werebothfallingwithinthecustomaryrulesofinterpretationofpublicinternationallaw.
109ThisinterpretationapproachisprovedbyotherWTO-cases,110andthestatusofArticles31and32oftheViennaConventionisfixedintheframeworkoftheWTOthattheinterpretationrulessetforthinArticles31and32oftheViennaConventionapplytotheinterpretationoftheprovisionsoftheWTOAgreement.
111Accordingtothetwoprovisions,theinterpretationoftheWTOjurisprudenceshouldbedonebasedontheprincipleofgoodfaith,theoriginalmeaningofthetextaswellasthecontextanditspurposeandobject.
InthecontextoftheWTO,itisrecognizedthatthetextofaprovisionisthefundamentalelementfortheinterpretiveprocess,112butArticle31(1)ofViennaConventionalsomakesclearthattheotherelements—"context,purposeandobjectofthetreaty"—playaroleasequallyasthetextandbetweenthemthereexistsnohierarchy.
113Therefore,alloftheseelementsshallbetakenintoaccountinaccordancewiththeprincipleofgoodfaithbydeterminingthemeaningofinterpretingtheprovisionatissue.
Basedontheaboveanalysis,itisclearthatcustomaryruleofinterpretationisthefundamentalinterpretativeapproachintheWTOandthisapproachconsidersnotonlythetextandthecontext,butalsothepurposeandobjectofthetreatyshallbeinaccordancewiththeprincipleofgoodfaithtakenintoaccount.
NowthequestionisabouttheappliedinterpretationapproachinChina—Rare105AppellateBodyReport,Japan—TaxesonAlcoholicBeverages(Nov.
1,1996)WT/DS8/AB/R,WT/DS10/AB/R,WT/DS11/AB/R,at10;AppellateBodyReport,EuropeanCommunities—CustomsClassificationofFrozenBonelessChickenCuts(Sep.
27,2005)WT/DS269/AB/R,WT/DS286/AB/RandCorr1,paragraph282;WTOABReport,UnitedStates—StandardsforReformulatedGasoline(May20,1996)WT/DS2/AB/R,paragraph17.
106Seefn.
26107Id.
at17.
108Seefn.
105,Japan—TaxesonAlcoholicBeverages.
109Id.
at10,11.
110Seefn.
105,EuropeanCommunities—CustomsClassificationofFrozenBonelessChickenCuts;AppellateBodyReport,UnitedStates—ImportProhibitionofCertainShrimpandShrimpProducts(Nov.
6,1998),WT/DS/58/AB/R.
111SeeAppellateBodyReport,Korea—DefinitiveSafeguardMeasureonImportsofCertainDairyProducts,WT/DS98/AB/R,Dec.
14,1999,paragraph80.
112Seefn.
105,Japan—TaxesonAlcoholicBeverages,at11.
113SeeSchollendorf,fn.
103at75;id.
at12.
230FRONTIERSOFLAWINCHINA[Vol.
10:211Earths.
Thisinterpretativeissueinthepresentcaseisreflectedmainlyinthefollowingaspectsasdiscussedinthenextsection.
2.
TheAppliedApproachintheAppellateBodyReportandthePanelReport.
—(1)Theinterpretativeapproachwithrespectofthoroughanalysisinappellatebodyreport.
TheappellatebodyhasbroughtforwardanopinionthatthequestionofapplicabilityofArticleXXshallbeansweredthroughathoroughanalysisbasedonthecustomaryruleofinterpretation.
114Theallegedinterpretativeapproachbasedoncustomaryruleofinterpretationisactuallyarightchoice,whichisconsistentwiththerequirementsthatallelements,includingthetext,contextaswellasthepurposeandobjectofthetreaty,shallbetakenintoaccount.
However,theallegedapproachwasnotreallyaccomplishedinthepresentcase–notalloftheelementssetoutinArticles31and32oftheViennaConventionaretakenintoaccount,althoughtheappellatebodyhastriedtorecoursetootherelementsbesidesthetext115andgonebeyondthenarrowtextanalysis.
Withafurtherobservation,itcanbefoundthatbyprovingthattheinterpretationinthecaseofChina—RawMaterialswasmadeonabasisofthoroughanalysis,theappellatebodyofChina—RareEarthshasonlyattachedtheimportancetothecontextofparagraph11.
3ofChina'sAccessionProtocolwithoutotherelementsprovidedintheArticle31oftheViennaConvention.
Iftheinterpretationhadbeenmadeonathoroughanalysisinaccordancewiththecustomaryruleofinterpretation,itwouldhavereachedatotaldifferentresult:TheappellatebodyoftheChina—RareEarthhasneglectedthefactthattheappellatebodyofChina—RawMaterialsneverconsidertheobjectandpurposeofthisprovisionatissuebyanalysingtheapplicabilityofArticleXXGATT.
Becauseparagraph1.
2oftheProtocolshowsthatparagraph11.
3ismeanttobeanintegralpartoftheWTOAgreement,thepurposeandobjectofparagraph11.
3116shouldbeanalysedinconnectionwiththepurposeandobjectoftheWTOAgreementitself.
However,theappellatebodyin114Seefn.
103,paragraph5.
55.
115InitsreporttheappellatebodyhasemphasizedmanytimesthatallrelevantelementsshallbeexaminedbyinterpretingtheapplicabilityofArticleXXtoparagraph11.
3oftheProtocol;id.
paragraph5.
55,paragraph5.
56andparagraph5.
57.
116ThepanelinUS—StainlessSteelstatedtheterm"objectandpurpose"inArticle31(1)isprecededbyitswhereastheterm"context"isprecededby"their.
"Thus,weconsiderthatArticle31(1)referstotheobjectandpurposeofthetreatyasawhole,ratherthanspecificprovisionsthereof.
SeePanelReport,UnitedStates—FinalAnti-DumpingMeasuresofonStainlessSteelfromMexico,WT/DS334/R,paragraph6.
16.
Inaddition,theAppellateBodyinEC—ChickenClassificationhighlightsthatitnotwouldbenecessarytodivorceatreaty'sobjectandpurposefromtheobjectandpurposeofspecifictreatyprovision,orviceversa.
Seefn.
105,EuropeanCommunities—CustomsClassificationofFrozenBonelessChickenCuts,paragraph238.
Inviewofthis,thepurposeandobjectiveofparagraph11.
3shallbeinterpretedinconnectionwithChina'sProtocolofAccession.
GiventhattheProtocolofAccessionisanintegralpartoftheWTOAgreement,thus,thepurposeandobjectiveoftheProtocolshallbesubjecttothepurposesandobjectivesoftheWTOAgreement.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT231China—RawMaterialsonlyfocusedonwhethertherewereanyspecificreferencestotheapplicabilityofArticleXXGATT1994toparagraph11.
3oftheProtocol.
117China'slineofargumentisbeingsupportedifonelooksatthepurposeandobjectiveoftheWTOtoanalysetheapplicabilityoftheGATT.
ThepreambleoftheWTOAgreementconfirmsthatthe"optimaluseoftheworld'sresourcesinaccordancewiththeobjectiveofsustainabledevelopment"andenvironmentalprotectionareintheinterestofallWTOmembers118andconstituteafundamentalpurposeandobjectoftheWTOitself.
Inviewofthis,itcanbefoundthattradeliberalizationmaybederogatedinordertopursuethenon-tradevaluesoftheWTO,suchasenvironmentalprotection.
119Thereforethepreamblecanberegardedasameanstoensurethatmembersareabletomakeuseoftheirrighttoregulatedtradeinamannerthatbalancesinterestsofenvironmentalprotectionandtradeobligations,includingallobligationsdefinedintheiraccessionprotocols.
120Inlightoftheaboveargument,theconclusionsmadebytheappellatebodyinChina—RareEarthsisproblematic—theanalysisoftheappellatebodyinChina—RawMaterialisnotathoroughanalysisandisnotconsistentwiththecustomaryrulesoftheinterpretation.
Moreover,theappellatebodyhasdeliveredawrongmessagethattheinterpretationthroughathoroughanalysisshallfollowafixedexaminationorder.
Thatis,aninterpretationshallbestartedwiththewording,thenthecontext.
Afterexaminingtheseelements,itthenturnstoexamineotherelements.
Ifaresultcanbealreadyreachedbasedonthecontext,thenthereisnoneedtoanalyseotherelements.
Inlightofthis,itmayexplainwhytheappellatebodyallegedthatallrelevantelementsshallbetakenintoaccountbutactuallyonlythetextandthecontextofparagraph11.
3oftheProtocolhasbeenexamined.
Intheappellatebody'sview,thecontextsofparagraph11.
3oftheProtocolcouldprovideaconclusion,thatis,ArticleXXGATTisnotapplicabletoparagraph11.
3oftheProtocol.
However,theappellatebodyneglectedthefact—withoutanexaminationofallelementssetoutinArticle31(1)oftheViennaConventionthereachedconclusionmaybenotproperandaccurate.
Moreover,astheelementsinArticle31(1)oftheViennaConventionhavethesameequalrole,sotheelementsrelatingtotheinterpretationshallnotbeexaminedonebyone,butshallbeconsideredasawholeatthesametime.
Therefore,itcouldbefoundoutthatthereweretwodefectsduringitsinterpretativeprocess:Ontheonehand,theappellatebodystillattacheditsimportanceonlytothecontextoftheprovisionatissuewithoutconsideringotherelementsrequiredbythe117Seefn.
48,paragraph306.
118SeePreambleofMarrakeshAgreementEstablishingtheWorldTradeOrganization.
119MarianPaschke,ExportRestrictionsinInternationalTradeinRawMaterials—ConclusionsfromtheWTOPanelandAppellateBodyReportintheChina/EU—RawMaterialsCase,1ChinaEULawJournal,97(2013).
120LIUYing,TheApplicabilityofEnvironmentalProtectionExceptionstoWTO-PlusObligations:InViewoftheChina—RawMaterialsandChina—RareEarthsCases,27LeidenJournalofInternationalLaw,125(2014).
232FRONTIERSOFLAWINCHINA[Vol.
10:211customaryrulesofinterpretation,121whichisnotconsistentwiththerequirementsprovidedinArticle31oftheViennaConvention;Ontheotherhand,theseconddefectisthattheappellatebodyofChina—RareEarthsfixedanexaminationorderbyapplyingthethoroughanalysis,andoncearesultbasedonanelementisreached,thentheremainingelementsdonotneedtobeexaminedmore.
(2)Theinterpretativeapproachomissioninpanelreport:OmissionitselfdoesnotmeantheinapplicabilityofArticleXXtoWTO-plusobligation.
Inthisdispute,thepanelstatedthatithasresortedtothecustomaryrulesofinterpretationtoanalysetheargumentsinaccordancewithArticle3.
2DSU.
122However,thefactisthatthepanelhaslimiteditsanalysistoapurelytextualapproach123insteadofafullapplicationofthecustomaryrulesofinterpretation,althoughithadannouncedtheapplicationofaninterpretativeapproachinaccordancewithArticle31toArticle32ViennaConvention.
Theconclusioncanbeprovedbytheanalysisofthemeaningofomissioninparagraph11.
3ofChina'sAccessionProtocol.
Theinterpretationofomissionisnotchallengedintheappellatebodyreport.
ButitdoesnotaffectthefactthattheinterpretationofomissionplaysakeyroleindecidingtheapplicabilityofArticleXXtoWTO-plusobligation,asthelackofanexpressreferencetoArticleXXGATTunderparagraph11.
3oftheAccessionProtocolisoneofthemainreasonswhytheapplicabilityoftheGATTwasdeniedinbothcases,China—RawMaterialsandChina—RareEarths.
Beforethepanel,ChinaarguedthatanomissionbyitselfdidnotmeanthattheauthorsoftheagreementhadtheintentiontodenymemberstheapplicabilityofArticleXXGATT.
124FacingthisChineseargument,thepanelonlyanalysedthecasebycomparingittotheearliercases,China—RawMaterialsandUS—CarbonSteel.
Althoughitrecognizedthatomissionsthemselveswerenotnecessarilydispositive,thepanelstillneglectedthefactsasdiscussedbelowPreviousWTOcasesshowthatomissioncanbeinterpreteddifferently.
InJapan—AlcoholicBeveragesII,apanelfirstexpressedthat"omissionmusthavesomemeaning.
"125InthecaseofCanada—Autos,theappellatebodystatedthat"omissionsindifferentcontextsmayhavedifferentmeaningsandomissionisnotnecessarilydispositive.
"126However,inthecaseofCanada—PatentTerm,theappellatebody121Intheexpressionbytheappellatebodyitalsofindsnocluethattheobjectandpurposeoftheprovisionshallbestressedduringaninterpretativeprocess.
Seefn.
102,China—RareEarths,paragraph5.
63andparagraph5.
74.
122Seefn.
47,paragraph7.
55.
123JuliaYaQin,ReformingWTODisciplineonExportDuties:SovereigntyoverNaturalResources,EconomicDevelopmentandEnvironmentalProtection,46JournalofWorldTrade1147,(2012).
124Seefn.
47,paragraph7.
63.
125Seefn.
105,paragraph111.
126SeeAppellateBodyReport,Canada—CertainMeasuresAffectingtheAutomotiveIndustry,WT/DS139/DS142/AB/R,paragraph138.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT233madetheconclusionthat"sometimestheabsenceofsomethingmeanssimplythatitisnotthere.
"127Inlightofthis,onemustmakeacleardistinctionbetweendifferenttypesofomissions.
Bytakingacloserlookatpreviouscases,suchdistinctioncanbefoundandconnectedtotheobjectandpurposeandthecontextoftheprovisionatissue.
128However,thepanelintheChina—RareEarthscasedidnotmakethecorrectdistinctionsoftheomissioninparagraph11.
3oftheAccessionProtocol.
ThepanelcametoitsconclusionpurelyonthebasisoftheopinionsformedbytheappellatebodyinChina—RawMaterials.
ThepanelwasoftheopinionthattheappellatebodyinChina—RawMaterialshadinterpretedtheomissioninaholisticapproach.
129However,thealleged"holistic"interpretationwasnotactuallyaccomplished,asanalysedabove.
130Onthecontrary,theappellatebodyofChina—RawMaterialshasactuallyusedastrictlytextualapproach.
Accordingtoitsopinion,onlyiftherehadbeenanexplicitreferencetoArticleXXGATT,itwouldhavebeenpossibletoacceptChina'sarguments.
Therefore,theconclusionmadebythepanelinChina—RareEarthsisproblematic,giventhefactthatthepanel'sfindingsarebasedontheunconvincingopinionoftheappellatebodyinChina—RawMaterials.
Accordingly,thepanelalsoresortedtoapuretextualanalysisindecidingthemeaningoftheomissioninparagraph11.
3ofChina'sAccessionProtocol.
Therefore,thepanelhasnotaccomplisheditsallegedinterpretationinconnectionwithitscontextaswellasitspurposeandobjective.
Acorrectanalysisisasfollows:Takingtheoriginalwordingofparagraph11.
3oftheProtocolintoaccount,onecanonlycometotheconclusionthatthereisinfactnoexplicitreferencetoGATT1994.
However,thisdoesnotnecessarilymeanthatChinacannotapplyArticleXXGATT1994toinvokecertainenvironmentalexceptions.
Anomissioncouldhavedifferentreasons,asshownbyearlierWTOdisputes,whichwouldhavetobeinterpretedinconnectionwithitscontextaswellasitspurposeandobjective.
JudgingbythegeneralcontextoftheProtocol,theopinionoftheappellatebodyinChina—RawMaterialsisnotconvincing.
Thecontextprovidedbyparagraph170of127AppellateBodyReport,Canada—TermofPatentProtection,WT/DS170/AB/R,paragraph78.
128Forexample,inthecaseofArgentina—TextilesandAppareltheappellateresortedtotheobjectandpurposeandcontextofArticleII:1(b)GATTtoconfirmthatalthoughthereisnosuchtypeofdutywascontainedinonemember'sschedule,itcanstillbeinterpretedthatanomissionincludedtypesofdutiesthataredifferentfromthetypesprescribedintheschedule.
ItcouldthereforebesubjecttoArticleII:1(b).
SeeAppellateBodyReport,Argentina—MeasuresAffectingImportsofFootwear,Textiles,ApparelandotherItems,paragraph47.
129Seefn.
47,paragraph7.
66.
130TheappellatebodyofChina-rareearthshasrestatedthattheappellatebodyofChina—RawMaterialshastakenathoroughanalysisbasedonthecustomaryruleofinterpretation.
Seefn.
102,paragraph5.
63andparagraph5.
65(Butinauthor'sopinionthisopinioninviewoftheflawedinterpretationappliedbytheappellatebodyinChina-RareEarths).
234FRONTIERSOFLAWINCHINA[Vol.
10:211China'sworkingpartyreportwouldhavesupportedthisassertionifithadbeenacceptedbytheappellatebody.
Unfortunately,theappellatebodyofChina—RawMaterialsrejectedtheuseofparagraph170asacontextforparagraph11.
3oftheProtocol,becauseinitsopinion,paragraph170issubjectedtoSectionIV.
D"InternalPoliciesAffectingForeignTradeinGoods.
"Asaconsequence,paragraph170ofChina'sworkingpartyreportonlyconcernsinternalpolicies.
131Theappellatebodycametotheconclusionthattheexportdutiesatissuedidnotfallwithinthescopeofinternalpolicies.
Suchaconclusionisworthdiscussing.
Itisnotuncommonthatonesubjectmaybeclassifiedintotwocategories.
Thedraftermightchoosetoclassifythesubjectunderanyofthosecategories.
Thisdoesnotnecessarilymeanthatthesubjectceasestohaveanyeffectontheothercategory.
132Furthermore,iftheappellatebodytookthemultilateralenvironmentalagreementasthecontextforinterpretationofparagraph11.
3,inthisdispute,UnitedNationsFrameworkConventiononClimateChange(UNFCCC)canbehelpfulfortheinterpretation,sinceChinaimposedtheexporttaxesforthesakeofreductionofpollution,includingreductionofthegreenhousegasesproducedbytheminingandprocessingofrareearths.
InthecaseofEC—ApprovalandMarketingofBiotechProducts,133thepaneladmittedthatinternationaltreatiescouldbeunderstoodastherulesofinternationallawunderArticle31(3)(c)oftheViennaConventionfortheinterpretationasacontext.
134Inaddition,onlytheinternationaltreatiesapplicabletoallthepartiesindisputecanbeusedasacontextforhelpingtheinterpretation.
135Therefore,withrespecttothefactthattheUS,EU,andJapanaswellasChinaareallthecontractingpartiesoftheUNFCCC,andtheUNFCCCemphasizesnotonlytheimportanceofreducingtheemissionsofgreenhousegasesandsustainabledevelopment,butalsoaffirmsthattheneedsofdevelopingcountriesfortheachievementofeconomicgrowthshallbetakenintoaccount,soitcouldalsosupportthatenvironmentalexceptionsofGATTshallappliedtoparagraph11.
3.
136Fromtheperspectiveofthepurposeandobjectiveofthisprovision,basedontheanalysisabove,theobjectiveandpurposeofparagraph11.
3shouldbeconnectedwiththepurposeandobjectoftheMarrakeshAgreement.
InlightoftheexplicitreferencetotheenvironmentalprotectioninthepreambleofMarrakeshAgreementtheimportanceofenvironmentalprotectionshallnotbedisregardedwhenconfrontingwiththeconflict131Seefn.
102,China—RareEarths,paragraph298.
132LIUHua,CommentontheInvocationofArticleXXforViolationofparagraphafe11.
3inChina—RawMaterials,3BeijingLawReview,154(2012).
133SeePanelReport,EuropeanCommunities—MeasuresAffectingtheApprovalandMarketingofBiotechProducts,WT/DS291/R,WT/DS292/R,WT/DS/293/R,May13,2003,134Id.
paragraph767.
135Id.
paragraph768andparagraph771.
136UnitedNationsFrameworkConventiononClimateChange.
UnitedNations1992,PreambleandArticle2(1)(2).
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT235betweenfreetradeandenvironmentalprotection.
Therefore,theomissioninparagraph11.
3oftheProtocolshallbeinterpretedthatArticleXXisapplicabletotheWTO-plusobligationunderparagraph11.
3oftheProtocolincaseoftheconflictbetweenenvironmentalprotectionandtradeliberalization.
Inlightoftheargumentsabove,theconclusionmadebythepanelinChina—RareEarthsisproblematicanditsappliedinterpretativeapproachiswrong,sincethepanel'sfindingsarebasedontheunconvincingopinionoftheappellatebodyinChina—RawMaterialswithoutconsideringallrelevantelementsininterpretingthemeaningoftheomission.
3.
TheInterpretationoftheSystemicRelationshipbetweenParagraph11.
3oftheAccessionProtocolandtheGATT1994inPanelandAppellateBodyReports.
—Inlightofthefactthatbothofthepanelandtheappellatebodyhaveappliedthewronginterpretativeapproachintheiranalysis,itisnecessarytodiscussthecorrectnessoftheconclusionsabouttheChineseargument—thesystemicrelationshipbetweenparagraph11.
3oftheAccessionProtocolandtheGATT1994,whichwereinvolvedinbothofpanelreportandappellatebodyreport.
ChinatriedtoarguefromasystemicperspectivetoshowthatArticleXXGATTisinfactapplicabletoparagraph11.
3oftheProtocol.
AccordingtoChinaparagraph11.
3isanintegralpartoftheGATT1994.
137However,bothofthepanelandtheappellatebodyoftheChina—RareEarthscaserejectedthatinterpretation.
(1)Interpretationofsystemicrelationshipintheappellatebodyreport.
Theappellatebodywasoftheopinionthattheterm"theWTOAgreement"playsnoroleindecidingthesystemicrelationshipbetweenindividualprovisionsoftheChina'sAccessionProtocolandtheMarrakeshAgreementandtheMultilateralTradeAgreementsattachedthereof,138becauseparagraph1.
2oftheProtocolservesaconnectingfunction,whichshows,togetherwithArticleII:2oftheMarrakeshAgreement,thattheProtocol,MarrakeshAgreement,andtheMultilateralTradeAgreementsattachedthereofformupasinglepackageofobligationsandrightsofChinaintheframeworkoftheWTO.
139Accordingtotheappellatebody,thespecificrelationshipbetweentheindividualprovisionoftheprotocolandtheMarrakeshAgreementandtheattachedMultilateralTradeAgreementsshallbereadthroughathoroughonacase-to-case.
140Asstatedabove,theappellatebodyhasnotactuallyconductedathoroughanalysis,soitneglectedafact:Althoughitisrecognizedthatparagraph1.
2oftheProtocolcannotclarifythespecificrelationshipbetweenanindividualprovisionoftheprotocolandanyoneoftheMultilateralTradeAgreementswhichattachtotheMarrakeshAgreement,but137Seefn.
47,paragraph7.
75;fn.
102,China—RareEarths,paragraph5.
63,paragraph5.
65.
138Id.
China—RareEarths,paragraph5.
63,paragraph5.
47andparagraph5.
73.
139Id.
paragraph5.
70.
140Id.
paragraph5.
63,paragraph5.
51andparagraph5.
68.
236FRONTIERSOFLAWINCHINA[Vol.
10:211paragraph1.
2hasnotonlyabridgefunction;infact,ifaninterpretationaboutthisprovisionmadeinaccordancewiththecustomaryrulesoftheinterpretation,thenitcanbefoundoutthatthisprovisioncanclarifytherelationshipbetweenanindividualprovisionoftheProtocolandtheentiretyoftheannexedMultilateralTradeAgreements.
Byanalysingthefunctionofparagraph1.
2oftheProtocol,theappellatebodydidnottakeparagraph1.
3oftheProtocolintoaccount.
141Iftheappellatebodyhadfocusedonparagraph1.
3oftheProtocol,whichstatesthat"…inthisprotocol,thoseobligationsinthemultilateraltradeagreementsannexedtotheWTOAgreement…shallbeimplementedbyChina,"itwouldhaverealisedthatChinahastofulfilobligationsnotonlycontainedintheMarrakeshAgreementbutalsoinitsattachedmultilateraltradeagreementsincludingtheGATT1994.
Thisarticlearguesthatitcouldbeinferredfromparagraph1.
3oftheProtocolthatChina'sAccessionProtocolrecognizesthebindingeffectofthemultilateraltradeagreementsannexedtotheMarrakeshAgreement.
142TheprovisiononlyexplicitlymentionsobligationsbutstillthegeneralprincipleofgoodfaithinaccordancewithArticle31(1)ViennaConventionhastobeconsidered.
TheViennaConventionindicatesthatanyinterpretationshallbemadeinan"honestandfair"manner.
143Therefore,aninterpretationofparagraph1.
3thatonlyimposesobligationsonChinawithoutgivingitthefreedomtoexerciseitsrightswouldbeinconsistentwithboth,theprincipleofgoodfaithaswellasArticle31(1)ViennaConvention.
Therefore,paragraph1.
3cannotbeinterpretedinawaythatdeniesChinaitsrightsingeneralorinthiscasedeniesitsrighttoinvokegeneralexceptionsunderArticleXXGATT.
ThisalsoimpliesthatChina'sAccessionProtocolmustbesubjecttothemultilateraltradeagreementsannexedtotheMarrakeshAgreement.
However,basedonparagraph1.
2oftheProtocol,itcannotbeconcludedthatChina'sAccessionProtocolisanintegralpartoftheGATT1994.
TheProtocoldoesnotonlycontainspecificationsaboutthetradingofgoodsbutalsoaboutGATSandothertrading.
Therefore,itcanbesaidthattheProtocolasawholeisanintegralpartoftheannexedmultilateraltradeagreements.
Accordingly,theindividualprovisionsoftheProtocolmustalsobesubjecttotheannexedagreementasawhole.
AstothequestionwhetheroneindividualprovisionoftheProtocolisanintegralpartofoneagreementoftheannexedmultilateraltradeagreements,itcanonlybemadebasedonthecharacterandnatureofthespecificprovisioninquestioninaccordancewiththe141Itisnotedthattheappellatebodyreferredparagraph1.
3oftheChina'sAccessionProtocolasacontextofparagraph1.
2oftheProtocolindecidingthemeaningoftheterm"theWTOAgreement.
"142GUANWenwei,HowGeneralShouldtheGATTGeneralExceptionsBeACritiqueoftheInterpretationApproachinChina—RawMaterials,inRCCLWorkingPaperSeries,(2012).
143M.
E.
Villiger,TheRulesonInterpretation:Misgivings,Misunderstandings,MiscarriageThe"Crucible"IntendedbytheInternationalLawCommissioninE.
Cannizzaroeds.
TheLawofTreatiesBeyondtheViennaConvention,OxfordUniversityPress(Oxford),109(2011).
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT237specificcase.
Therefore,thecommitmentsmadeinparagraph11.
3oftheProtocolmustbesubjecttotheGATT1994,sincetheirnatureandcharacteriscloselyrelatedtothefieldof"tradeingoods.
"Therefore,theconclusionoftheappellatebodyaboutthesystemicrelationshipbetweenparagraph11.
3oftheProtocolandArticleXXGATTisproblematicinlightoftheapplicationoftheflawedinterpretativeapproach.
ItcanbeconcludedthattheindividualprovisionsoftheprotocolrelatingtotradeingoodsareinfactsubjecttotheGATT1994basedonarightinterpretativeapproachinaccordancewiththecustomaryrulesoftheinterpretation.
(2)Interpretationofsystemicrelationshipinthepanelreport.
Withrespecttothisissue,thepanel'sinterpretationaffordsagreatimportancetothewordingofthetextitselfwithouttakingotherelementsintoconsideration.
Itfoundthatunlessitwasexpresslystipulatedthatparagraph11.
3oftheProtocolisanintegralpartofoneormoreofthemultilateraltradeagreementsattachedtotheMarrakeshAgreement;144China'sargumentbasedonparagraph1.
2oftheAccessionProtocolcouldnotbeaccepted.
Suchawayofinterpretationwasnotinconsistentwiththerequirementsofthecustomaryrulesofinterpretation.
Thepanelclearlydistortedthemeaningofparagraph1.
2oftheProtocol.
Accordingtothepanel'sinterpretation,theProtocolitselfisanintegralpartoftheMarrakeshAgreement,butnotofitsannexedmultilateraltradeagreements.
Withrespecttothisissue,thepanelhasmadethesamemistakeastheappellatebody,whichis,itneglectedthecontextofparagraph1.
2ofChina'sAccessionProtocol;145moreover,itsanalysiswasmorelimitedtothewordingsofaprovisionincomparisonwiththeappellatebody,whichcanbeshownfromthefollowinganalysis:Thepanelstatedthatparagraph1GATT1994onlyreferredtoprotocolspre-datingtheMarrakeshProtocolandtheentryintoforceoftheWTOAgreement.
146Moreover,thepanelfoundthattheterm"consistof"inparagraph1impliedthatitwasan"exhaustive,closed"list.
147Therefore,China'sAccessionProtocol,whichenteredintoforceaftertheestablishmentoftheWTO,shouldbeexcludedfromtheGATT1994.
However,suchaninterpretationisobviouslydependentonthewordingitselfofaprovision,andthereforeitisquestionable.
Thepanelneitherexplainstheordinarymeaningof"consistof"nordoesitelaborateonwhichbasisitconcludedthatthelistofparagraph1GATTwasexhaustedorclosed.
Thepanelalsoignoredquestionssuchas"ofwhatkindofnaturearepost-1994protocolsofaccessionifpost-1994protocolshavenothingtodowiththeGATT1994"and"whyareprotocolsofaccessionundertheGATT1947andthoseundertheWTO144Seefn.
47,paragraph7.
80.
145Seethediscussionintheabovesubsectionabouttheinterpretationaboutthesystemicrelationshipintheappellatebodyreport.
146Seefn.
47,paragraph7.
83.
147Id.
238FRONTIERSOFLAWINCHINA[Vol.
10:211systemtreateddifferently.
"Withoutgivingfurtherexplanations,thepanel'sconclusionbasedonparagraph1GATT1994,whichholdsnoexpressreferencetoanexclusionofpost-1994accessionprotocols,isnotconvincing.
Itisknownthatthepost-1994accessionprotocols,unliketheaccessionprotocolsunderGATT1947,arenotexclusivelydevotedtothesinglesubjectmatteroftradeingoods.
Theyare,onthecontrary,extendedtothewholespectrumoftheWTOAgreement,includingservicesissuesandotherissuesnotcoveredbytheGATT1994.
148Therefore,itisunderstandablethatpost-1994protocolsarenotexpresslyprescribedbytheGATT1994duetotheirwidecoverage.
Inlightofthis,innoeventthisparagraph1ofGATT1994shallbecomeanargumenttosupporttheopinionoftheexclusionofChina'sAccessionProtocolfromGATT1994.
Basedontheargumentsabove,itcanbeconcludedthattheappliedinterpretativeinfactisnotconsistentwiththecustomaryrulesoftheinterpretationandtherefore,bothofthepanelandtheappellatebodymadeflawedconclusions.
B.
WhethertheFindingofPanelReportIsConsistentwiththeEnvironmentalProtectionInterestsContainedinthePreambleoftheWTOAgreementThepreambleoftheMarrakeshAgreementstates:"Therelationsinthefieldoftradeandeconomicendeavourshould…beallowingfortheoptimaluseoftheworld'sresourcesandinaccordancewiththeobjectiveofsustainabledevelopment,seekingbothtoprotectandpreservetheenvironment.
"149Obviously,thepreamblerecognizesthatenvironmentalprotectionandsustainabledevelopmentaretwomainobjectivesoftheWTOmultilateraltradesystem.
150However,thefindingsofthecaseChina—RareEarthsabouttheinapplicabilityofArticleXXGATTappeartoignoretheseobjectives.
151Althoughitisrecognizedthatasovereignstatehastherighttotakemeasurestoprotecttheenvironmentaswellashumanhealthorlife152andalsoconfirmedthataninterpretationthatpreventssuchastatefromtakingthesemeasuresisinconsistentwiththepurposeoftheWTOAgreement,153itendsupcomingtoaconclusionthatiscontrarytothepanel'sownstatement.
Itseemsthat,forthesakeoftheinapplicabilityoftheenvironmentalexceptionsinArticleXXGATTtoparagraph11.
3ofChina'sAccessionProtocol,thepanelhasmadearesult-orientedanalysiswheninterpretingChina's148Id.
149SeePreambleoftheMarrakeshAgreementEstablishingtheWorldTradeOrganization.
150ElisaBaroncini,TheapplicabilityofGATTArticleXXtoChina'sWTOAccessionProtocolintheAppellateBodyReportoftheChina—RawMaterialsCase:SuggestionsforaDifferentInterpretativeApproach,1ChinaEULawJournal,23(2013).
151Theenvironmentalprotectioninterestisnotdiscussedintheappellatebodyreport.
TheobjectiveofenvironmentalprotectionsetoutinthepreambleoftheWTOAgreementisalsonotmentionedintheanalysismadebytheappellatebody.
Sowithrespecttothisissuethediscussionwillaroundthepanelreport.
152Seefn.
47,paragraph7.
111.
153Id.
paragraph7.
114.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT239argumentinlightofthepurposeandobjectoftheWTOAgreement.
Thepanel'sreportindicatedthatunlessChinacouldproveexportdutieswerethe"onlytypeofinstrument"thatChinacouldtaketoprotecttheenvironmentandhumanhealthorlife,154theassertionbasedontheobjectiveandpurposeoftheWTOAgreementcouldnotbesupported.
Therefore,thisanalysisisnotpersuasive.
China,asasovereignstate,hastherighttodecidewhichinstrumentitwilltaketoprotectitsenvironmentaswellashumanlifeorhealth.
Inthepresentcase,theactionChinachosewastoestablishcertainexportduties.
Thequestionsrelatingtothe"necessitytest,"whetherexportdutiesmakeamaterialcontributionorwhetherexportdutiesaretheonlyinstrumentsthatcanbeused,shouldbeexaminedunderArticleXX(b)GATT1994,ratherthanbeingexaminedwiththegeneralapplicabilityofArticleXXGATT.
OnlyifArticleXXGATTisapplicabletoparagraph11.
3oftheProtocolthepanelhasreasonstoexaminethenecessityofthetakenactionsunderArticleXX(b)GATT1994.
However,inthisdispute,accordingtothepanel'sreport,ArticleXXGATTisnotapplicabletoparagraph11.
3oftheProtocol.
Therefore,thereshouldbenoneedforanecessitytest.
Initsreport,however,thepaneldidexaminethenecessityofChina'sactions,whichraisesthequestionwhythePanelexaminestherequirementsofnecessityinthecontextoftheGATT'sgeneralapplicability.
Afterall,thequestionwhethertheinstrumentthatChinachoseisnecessaryforenvironmentalprotectionispartoftheexaminationofArticleXX.
Ithasnothingtodowiththearticle'sapplicability.
IfamemberinvokesArticleXX(b)or(g)GATTtodefenditstrade-restrictivemeasure,thenthequestions,whetherthemeasuresaimatenvironmentalprotectionorothereconomicpurposesandwhetherthetakenactionsarenecessary,havetobejudgedunderArticleXXGATTandshallnotinfluencetheassessmentoftheapplicabilityofArticleXX(b)or(g),aslongastheprimafacieevidenceprovesthatarelationshipbetweenenvironmentalprotectionandthetrade-restrictivemeasuresexist.
Thepanel'sfindingsleadtowardstheinapplicabilityofArticleXXGATT,whichsendsapowerfulmessage:TradeliberalizationappearsthemostsacredobligationofaWTOmembercomparedtotheothernon-tradevalues.
155Itseemslikethetradeliberalizationcommitmentscannotbederogated,eveniftheyareinconflictwiththeothernon-tradevaluesthatmemberneedtopursue.
156Suchamessageisdisappointing.
UndertheWTOmultilateraltradesystem,thereshouldbenohierarchybetweentradeliberalizationandothernon-tradevalues.
Onthecontrary,theWTOdevotesitselftobalancingtheinterestsbetweenfreetradeandthenon-tradevalues.
ThepreambleoftheWTOAgreementacknowledgestheprinciplesoftradeliberalizationaswellastheprincipleofsustainabledevelopment,whichshowsthat154Id.
paragraph7.
113.
155SeeQin,fn.
123.
156SeeBaroncini,fn.
150.
240FRONTIERSOFLAWINCHINA[Vol.
10:211theWTOmultilateraltradesystempursuesamodelofsustainableeconomicdevelopmentinassociationwiththeenvironmentalandsocialprogress.
AlsotheWTOjurisprudencehasshowntheWTO'sendeavourtoachievesuchbalance.
ThecaseofUS—Shrimps157isregardedasaturningpointinthefieldoftradeandenvironmentalprotection158andtheinterpretationsoftheenvironmentalprovisionsoftheGATT.
ThesubsequentcaseofEC—Asbestos159inwhichthemeasureswereinconsistentwithtradeliberalizationobligations,werefoundtobejustifiedunderthegeneralexceptionsoftheGATT160forthefirsttimeinGATT/WTOhistory.
ThisimpliesthatsincethenhealthandenvironmentalinterestsofmemberstatesbelongtotheseriousconcernsoftheWTOsystem.
Therefore,itmaybeconcludedthattheviewsofthepanelinChina—RareEarthsrepresentastepbackwards.
Thepaneldeemedtoconsiderthetradeliberalizationcommitmentsasabsolute161obligationsandneglectedtheenvironmentalprotectioninterestsofmemberstates.
Theinterpretationofparagraph11.
3shouldbeconstruedincompliancewiththeconceptofsustainableeconomicdevelopmentthatisenshrinedintheWTOpreamble.
Insummary,thefindingsonthenon-applicabilityoftheGATT'senvironmentalexceptionstoChina'sAccessionProtocolarehighlyquestionable.
FirstlytheappliedinterpretativeapproachisinfactnotconsistentwiththerequirementsofArticle31ViennaConvention,whichrequiresalltherelevantelements,includingtext,context,purpose,andobjective,tobetakenintoaccount.
Secondlyandfromanenvironmentalperspective,thefindingsofthepanelappearnottobereconcilablewiththeconceptofsustainableeconomicdevelopmentenshrinedintheWTOpreamble.
Theconceptofsustainableeconomicdevelopmentpromotesinternationaltradetogetherwiththeoptimaluseofworld'sresourcesandenvironmentalprotection.
Inlightofthis,theWTOjudiciaryshouldinthefuturerevisethisnot-persuasiveresult.
Article3.
2DSU162emphasizesthatsecurityandpredictabilityareverycrucialtothemultilateraltradingsystem.
Accordingly,panelsandappellatebodiesoftenresorttopreviousreportsasadecision-makingaid,butthepriorpracticesarenotdecisive.
Thereisinfactnoprovisionrelatingtothelegalforceofpriorjurisprudence.
163Therefore,the157SeePanelReport,UnitedStates—ImportProhibitionofCertainShrimpandShrimpProducts,WT/DS58/RofMay15,1998;WT/DS58/AB/R,Oct.
12,1998.
158MeinhardHilf,FreiheitdesWelthandelscontraUmweltschutz(FreedomofWorldTradeVersusEnvironmentalProtection),NeueZeitschriftfürVerwaltungsrecht(NewMagazineAdministrativeLaw),at483(2000).
159SeeAppellateBodyReport,EuropeanCommunities—MeasuresAffectingAsbestosandProductsContainingAsbestos,WT/DS135/R,Sep.
18,2000;WT/DS135/AB/R,Mar.
18,2001.
160MaryFooter&SamanZia-Zarifi,EuropeanCommunities—MeasuresAffectingAsbestosandAsbestos-ContainingProducts:TheWorldTradeOrganizationonTrialforItsHandlingofOccupationalHealthandSafetyIssues,3MelbourneJournalofInternationalLaw,(2002).
161SeeBaroncini,fn.
150.
162UnderstandingonRulesandProceduresGoverningtheSettlementofDisputes.
163SeeThiedemann,fn.
14at28.
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT241possibilitytorelyonanearlierdecisionregardingthenon-applicabilityoftheGATTisnotcompelling.
Inparticular,theinterestinenvironmentalprotectionandasustainabledevelopmentisincreasingandbecomingahighlyregardedintheinternationalcommunity.
164V.
RECOMMENDATIONFORTHEINTERPRETATIONOFTHEAPPLICABILITYOFENVIRONMENTALPROVISIONSOFTHEGATTTOWTO-PLUSOBLIGATIONSThedisputesofChina—RareEarthsandChina—RawMaterialsareonlyastarting-point.
ThegeneralenvironmentalawarenessisrisingandChina'spowerfulpositionasanexportcountryofnaturalresourceswillcontinueforalongtime.
Moreover,whethertheenvironmentalprovisionsunderArticleXXGATTareavailabletothoseWTO-plusobligationsthatstipulatetheeliminationofexportdutiesisnotonlyaconcernforChina.
Thismatterislikelytoaffectotheraccedingmembers165thathaveenteredintoexportdutycommitments,whichdonotcontainexpressreferencetoanyGATTexceptions.
LikeChina,mostofthesememberswillbefacedwithsevereenvironmentaldegradationbutatthesametimewillbedependentontheexportofnaturalresources.
ItwouldcontradictanysenseofjusticeifprovisionsonenvironmentalexceptionsarenotappliedtothoseWTO-plusmembers.
ItisforeseeablethattheconflictofenvironmentandtradewillcontinuetoplayanimportantroleinthefutureandsimilarWTOdisputeswillhavetobesettled.
Itisthereforenecessarytodrawuparoadmaptoresolvethisissue,especiallysincetheWTOdoesnotcontaingeneralandunequivocalprovisionsthataddressthisissue.
TheprocedureoftheDSUshowsthattheWTOjudiciarymainlyconcludesitsfindingsbasedonexpresstextreferencecontainedinWTO-plusobligations.
ThisresultedintwoentirelydifferentandcontradictoryfindingsregardingtheapplicabilityofArticleXXGATTtodefendtheviolationofaspecificcommitmentinChina'sAccessionProtocol.
InChina—PublicationsandAudiovisualProducts,166theappellatebodysupportedtheapplicabilityofArticleXXtotheChineseWTO-plusobligationunderparagraph5.
1oftheProtocolduetotheexpresstextuallinkcontainedinthisprovision;167whiletheappellatebodyofChina—RawMaterials168andthepanelofChina—RareEarthsrejectedtheapplicabilitybecausetheprovisionwaslackingasimilarreference.
Suchfindingsleadtouncertaintyforaccedingmembers,whichmakethemunsatisfactory.
164SeeLIU,fn.
120at125.
165ForexampleMongolia,Latvia,SaudiArabiaandMontenegroallcommittedtoeliminateexportdutiesonallorspecificproductsandnoneofthemhaveanexpressreferencetotheGeneralExceptionsofGATTintheircommitments.
166SeeChina—MeasuresAffectingTradingRightsandDistributionServicesforCertainPublicationsandAudiovisualEntertainmentProducts,WT/DS363/R,Aug.
12,2009;WT/DS363/AB/R,Dec.
21,2009.
167Seefn.
99,paragraphs229–233.
168Seefn.
48.
242FRONTIERSOFLAWINCHINA[Vol.
10:211Aninterpretativeapproachdependingontheverbatimtextoftheprovisionatissueisbasedontheassumptionthat"eachtermoftheaccessionprotocolwascarefullynegotiatedanddrafted,andthatanyomissionofanexplicitreferencetoanotherWTOAgreementwasadeliberatechoice.
"169However,suchassumptioncannotbeacceptedbecauseitdisregardsthefactthatanaccedingmembermaylack"experience,competenceofnegotiationanddecision-making.
"170Hence,itisnotuncommonthatanaccedingmemberlooselydraftsthetermsofitsaccessionprotocol.
171Consequently,apurelytextualapproachisnotacceptable.
Analternativeinterpretativeapproachistheholisticinterpretation.
Infact,theWTOjurisprudenceadherestothisinterpretativeapproachthatiscontainedintheViennaConvention.
ThepanelintheUS—Section301TradeAct172casestatedthat:"TheelementsreferredtoinArticle31—text,contextandobjectandpurposeaswellasgoodfaith—aretobeviewedasoneholisticruleofinterpretation.
"173Therefore,theholisticruleofinterpretationisconsistentwiththecustomaryruleofinterpretation,whichisembodiedintheArticles31and32oftheViennaConvention.
ThisinterpretativeapproachisalsoemphasizedbytheappellatebodyinthecaseofChina—RareEarthsandwascalledasathoroughanalysis,butitisnotactuallyaccomplishedinviewofitstwodefectsasaboveanalyzed.
Aholisticinterpretativeapproachisappliedbytheexaminationof"allrelevantelementstakenasawhole,ratherthanexaminingeachelementinturnuntilthetermatissueisrevealed.
"174Therefore,itisrequiredtonotonlyconsiderthemeaningofthetextandthecontext,butalsotoconsiderthepurposeandobjectiveofthetreatyinaccordancewiththeprincipleofgoodfaith.
Here,thecontextshouldbeunderstoodaccordingtoArticle31(2)and(3).
Therefore,itshouldrememberthatwithrespecttothedisputeof"environmentandtrade,"themultilateralenvironmentalagreementsmayalsobeconsideredasthecontextoftheprovisionatissue;furthermore,regardingthisthemefromtheperspectiveofgoodfaith,theapplicabilityofArticleXX(b)or(g)GATTshallbeinterpretednotonlybasedontheverbatimtextbutinfullconsiderationoftherealintentionsofthesignatory.
ArticleXX(b)and(g)GATTweredraftedasgeneralexceptionsforenvironmentalprotectionandtheconservationofnaturalresources.
Fromtheperspectiveofgoodfaith,itcannotbeinferredthatanaccedingmemberwhodoesnotexpresslyexcludetheapplicationofenvironmentalexceptionshastheintentiontogiveup169SeeQin,fn.
123at10.
170Id.
171Id.
172SeePanelReport,UnitedStates—Sections301–310oftheTradeAct1974,WT/DS152/R,Dec.
22,1999.
173Id.
paragraph7.
22.
174FedericoOrtino,TreatyInterpretationandtheWTOAppellateBodyReportinUS—Gambling:ACritique,9JournalofInternationalEconomicLaw,131(2006).
2015]THEAPPLICABILITYOFENVIRONMENTALEXCEPTIONSOFTHEGATT243therighttoinvokesuchprovisions.
Environmentalprotectionisoneofthemostimportantissuesanddoesnotonlyconcernhumanhealthbutalsotheeconomicdevelopmentassuch.
Therefore,itishardtobelievethatanaccedingstateintendstosimplywaivesuchanimportantright.
ThepurposeandobjectiveofprovisionscontainedinaWTO-pluscommitmentshallbeinterpretedinconnectionwiththeprotocolofaccession.
Aprotocolofaccessionis,accordingtotheopinionofthedisputesettlingbody,anintegralpartoftheWTOAgreement.
175Therefore,thepurposesandobjectivesoftheWTOAgreementcanbeusedtointerpretthecommitmentsmadeinanaccessionprotocol.
Asstatedabove,environmentalprotectionisoneoftheWTOAgreement'sobjectivesandshallbetakenintoaccountaspartoftheWTO-plusobligation'sinterpretation.
176TheholisticinterpretationisofgreatimportancetodecidetheapplicabilityofenvironmentalprovisionsoftheGATTtoWTO-plusobligations.
AlthoughthepanelandtheappellatebodyinChina—RareEarthsclaimedtohavefollowedthecustomaryrulesofinternationalpubliclaw,theyonlymadeapurelytextualapproachandpossiblecontextanalysisinsteadofaimingforaholisticinterpretation.
Asaconsequence,thevaluesofenvironmentalprotectionandsustainabledevelopmentwereneglectedincomparisontothevaluesoftradeliberalization.
Infuturedisputes,itmustbeguaranteedthattheholisticinterpretativeapproachisactuallyappliedandnotonlyannouncedbythepanel.
Itcanbeconcludedthat,inaccordancewiththeholisticinterpretation,theenvironmentalprovisionsunderArticleXX(b)and(g)GATTshouldbeunderstoodasapplicabletoWTO-plusobligationsofanyaccessionprotocol,unlessexpresslyexcluded.
CONCLUSIONTheChina—RareEarthscasereflectstheconflictbetweenenvironmentalprotectionandtradeliberalization.
BothofthemareexpresslyhighlightedinthepreambleoftheWTOAgreementandthereforeshallbeequallytreatedandrespected.
Thismeansthattheinterestsoftradeliberalizationcannottakepriorityoverenvironmentalinterests.
ArejectionofaWTOmember'srighttoinvokeenvironmentalexceptionstojustifytrade-restrictivemeasurethatwouldotherwisebeaviolationofitsaccessionprotocol'scommitmentsisnotinconformitywiththeenvironmentalinterestsofstatessufferingfromenvironmentaldeterioration.
ThisincludesinparticulartheenvironmentalexceptionsunderArticleXX(b)and(g)GATT,whichareessentialcomponentsoftheWTOsystem.
Nevertheless,theapplicabilityofthoseexceptionstoWTO-pluscommitmentshasbeenquestioned.
TheWTOAgreementdoesnotclarifytherelationsbetweenprotocolsof175SeeAu,fn.
45at112.
176SeeLIU,fn.
120.
244FRONTIERSOFLAWINCHINA[Vol.
10:211accessionandtheGATT.
Thus,interpretationbecomesthekeytotheproblem.
TheinterpretativeapproachappliedinChina—RareEarthsresultedinanexclusionoftheenvironmentalexceptionstojustifytheimposedexportduties.
ImposingexportdutiesisaviolationofChina'sAccessionProtocolandwithoutanymeansofjustification,thebalancebetweenthevaluesoftradeliberalizationandthevaluesofenvironmentalprotectionisthreatened.
Analternativeinterpretationistheholisticinterpretativeapproach,whichrequiresallrelevantelementstobeexamined.
ThisinterpretativeapproachisalreadyagreedintheappellatebodyreportofChina—RareEarths,sothemostimportantstepistoaccomplishthisapproachinthepractice.
Accordingtothisholisticinterpretation,omissionsinitselfdonotnecessarilymeanthatstatesintendtowaiverights.
Bycontrast,accordingtotheprincipalofgoodfaithandbasedontheobjectiveandpurposeoftheWTOAgreement,itshouldbeinterpretedthatenvironmentalprotectionexceptionsisapplicable.
SuchaninterpretationalsosafeguardstheenvironmentalinterestsofWTOmembersandmaintainsthebalancebetweentradeandthenon-tradevaluesoftheWTO.
IthastobenotedthattheproblemofapplicabilityonlydetermineswhetherChinahastherighttoinvokeArticleXX(b)or(g)GATT1994tojustifymeasuresthatareinconsistentwithitsWTO-plusobligationprescribedintheProtocolofAccession.
ThisisonlythefirststeptowardsresolvingtheconflictbetweenthelegalimportanceoftheprotectionoftheenvironmentandtheprincipleoftradeliberalizationundertheGATT.
ThefinalkeytoresolveanyconflictbetweenthesebasicissueswithintheWTOframeworkistoadjusttrade-restrictivemeasurestotherequirementsofArticleXXGATT1994.