A couple months ago, I mentioned that the China - Exportation of Raw Materials dispute was getting underway, and that I would come back to the dispute when GATT Article XX came up. USTR recently posted the complainants' oral statement in the case on its web site, and it has a lot to say on Article XX, enough that I think I'm going to turn this into GATT Article XX week on the blog. I'll do a bunch of posts with short excerpts from the oral statement, and then one bonus post on an Article XX issue unrelated to the case.
First up is the issue of GATT Article XX's relationship to non-GATT Agreements. I've mentioned this issue on the blog before, here, here, and here.
Here's what the complainants argued in relation to China's invocation of Article XX in relation to a claim under China's Accession Protocol:
56. As a threshold matter, China’s attempt to justify its export duties on coke, fluorspar, magnesium and manganese metal, and magnesium, manganese and zinc scrap, through the exceptions contained in Article XX of the GATT 1994, is misplaced. China bears the burden of demonstrating the applicability of Article XX of the GATT 1994 to paragraph 11.3 of its Accession Protocol. China has not done so. Indeed, the GATT 1994 exceptions are not applicable to the commitment in paragraph 11.3 of China’s Accession Protocol.
57. By its terms, Article XX applies strictly to the GATT 1994. In its chapeau, Article XX states, in relevant part: “. . . nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures . . . .” (Emphasis added.) The referenced “Agreement” in Article XX is the GATT 1994. Thus, if Article XX is to apply to an obligation in an accession protocol, the language and the context of that particular obligation must provide a basis for the applicability of Article XX.
58. In this regard, the Appellate Body report in China – Audiovisual Products is instructive. In
that dispute, the issue was whether the Article XX exceptions applied to China’s trading rights commitment in paragraph 5.1 of the Accession Protocol. The Appellate Body found that Members agreed to apply the Article XX exceptions to paragraph 5.1, however, the Appellate Body’s reasoning was based on the specific language of paragraph 5.1.59. Paragraph 5.1 begins: “Without prejudice to China’s right to regulate trade in a manner consistent with the WTO Agreement . . . .” The Appellate Body reasoned that the explicit reservation of a “right to regulate trade in a manner consistent with the WTO Agreement” included a right to adopt regulations justified under Article XX, and thus concluded that the Article XX exceptions of the GATT 1994 are available as justifications for contravening the trading rights commitments in paragraph 5.1.
60. The language of paragraph 11.3 is in sharp contrast with the language in paragraph 5.1 of the Accession Protocol. The language in paragraph 11.3 describing both the obligation and its two exceptions, is specific and narrowly circumscribed, unlike the language in paragraph 5.1.
So what is the relevance of the China - Audiovisual Products case here? Is the U.S. distinction between paragraphs 11.3 and 5.1 of the Accession Protocol correct? Here's what I said on this blog about the AB's findings in that case right after the report came out:
What does this mean for GATT Article XX as a defense to claims under other WTO agreements? Perhaps nothing, as the finding may be limited to the context of para. 5.1 of the Accesion Protocol.
And here's what we said in our DSC:
Although there is uncertainty in the Appellate Body's findings, there is nonetheless some useful guidance. Based on its approach here, it may be likely that the Appellate Body will decide the question for each agreement on its own terms, rather than reject such an argument out of hand. Every agreement has some degree of cross-reference between it and the GATT. With the Accession Protocol, it was the language about "consistent with the WTO Agreement." This language gave the Appellate Body a clear textual tie between the GATT (one of the WTO agreements) and [paragraph 5.1 of] the Accession Protocol. The relationship between the other WTO agreements and the GATT is varied and complex, and the specific terms of each much be taken into account when answering this question.
