China’s Export Restrictions of Raw Materials and Rare Earths : A New Balance Between Free Trade and Environmental Protection?

On March 13, 2012, Japan, the United States, and the European Union filed Requests for Consultations (Requests) with the World Trade Organization (WTO), contesting China's export restrictions on rare earth elements (REE). The Requests were long expected, given the growing importance of REE, coupled with China's near-total dominance in the REE market. This Article predicts that, in light of the W4TO's recent Appellate Body decision in the China - Raw Materials case, China will not successfully defend its REE export restrictions under the General Agreement on Tarnffs and Trade (GATT 1994). The legal issues that arise in both China - Raw Materials and China's export restrictions of REE are significant for WTO jurisprudence because they address long-standing tensions between free trade and environmental protection. This Article discusses the Raw Materials Appellate Body's analysis of the environmental and conservation defenses China raised under GATT 1994 Articles XI, XX(b), and XX(g). While China's export restrictions were held to violate its WATO obligations, the interpretation of Articles XX(b) and XX(g) left WTO jurisprudence largely unchanged and demonstrated the Appellate Body's willingness to uphold legitimate environmental and conservation measures. This Article then evaluates the factual and evidentiary issues China faces in the REE dispute, in light of China - Raw Materials, and identifies potential hurdles that will impair China's ability to prevail in the REE case