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In defense of China's right to restrict its strategic exports
By Mei Xinyu |
July 2, 2009, Thursday
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THE United States and European Union took action against China on June 23 for restricting exports of industrial raw materials by bringing the dispute before the World Trade Organization.
However, it is China's right - a basic right that can by no means be violated with the excuse of free trade - to restrict the export of strategic raw materials.
The right is stated in the Declaration on the Establishment of a New International Economic Order, which was adopted by the United Nations General Assembly in 1974.
"Full permanent sovereignty (is recognized) of every State over its natural resources and all economic activities. In order to safeguard these resources, each State is entitled to exercise effective control over them and their exploitation with means suitable to its own situation, including the right to nationalization or transfer of ownership to its nationals, this right being an expression of the full permanent sovereignty of the State...." says the declaration.
Likewise, documents by the World Trade Organization that set international trade rules recognize the same right.
Admittedly, WTO and its predecessor, the General Agreement on Tariffs and Trade (GATT) both aim at liberalizing world trade.
But the WTO rules are applicable to WTO member counties that limit import so as to ensure all members treat imported and locally produced goods equally.
The WTO rules are not applicable when WTO members limit their own exports.
The US blamed China's decision to limit its exports by quoting the Article 11 of (GATT) which was about the general elimination of quantitative restrictions.
Even if they neglect the fact that China is recognized by WTO and GATT as a developing country and thus enjoy the right to some special trade measures in favor of its own economic and social development, they should acknowledge the "general exceptions" stated in the Article 20 of GATT.
It states: "Nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures," and there are four that are applicable to China's case:
(b) necessary to protect human, animal or plant life or health;
(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;
(i) involving restrictions on exports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan;
(j) essential to the acquisition or distribution of products in general or local short supply; Provided that any such measures shall be consistent with the principle that all contracting parties are entitled to an equitable share of the international supply of such products.
Obviously, now that China applies the same export quota and export tariff to all its trade partners, the blame from the US and European Union is groundless.
In fact, the US and the European Union have set a very bad example in this respect. What they are now advocating conflicts with many measures they themselves practice.
It must be noted that the export control of these two parties are the widest as well as strictest in the world.
In 1949 when the People's Republic of China was founded, the US issued its NSC41 document with which it created a broad and rigid export control system against China.
The US not only enforced export controls on China during and after the cold war, but promoted the establishment of the Wassenaar Arrangement, the members of which enforced export controls on certain countries.
(The author is a senior researcher under the Ministry of Commerce. The views expressed are his own. He can be reached at http://meixinyu.blog.sohu.com)
However, it is China's right - a basic right that can by no means be violated with the excuse of free trade - to restrict the export of strategic raw materials.
The right is stated in the Declaration on the Establishment of a New International Economic Order, which was adopted by the United Nations General Assembly in 1974.
"Full permanent sovereignty (is recognized) of every State over its natural resources and all economic activities. In order to safeguard these resources, each State is entitled to exercise effective control over them and their exploitation with means suitable to its own situation, including the right to nationalization or transfer of ownership to its nationals, this right being an expression of the full permanent sovereignty of the State...." says the declaration.
Likewise, documents by the World Trade Organization that set international trade rules recognize the same right.
Admittedly, WTO and its predecessor, the General Agreement on Tariffs and Trade (GATT) both aim at liberalizing world trade.
But the WTO rules are applicable to WTO member counties that limit import so as to ensure all members treat imported and locally produced goods equally.
The WTO rules are not applicable when WTO members limit their own exports.
The US blamed China's decision to limit its exports by quoting the Article 11 of (GATT) which was about the general elimination of quantitative restrictions.
Even if they neglect the fact that China is recognized by WTO and GATT as a developing country and thus enjoy the right to some special trade measures in favor of its own economic and social development, they should acknowledge the "general exceptions" stated in the Article 20 of GATT.
It states: "Nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures," and there are four that are applicable to China's case:
(b) necessary to protect human, animal or plant life or health;
(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;
(i) involving restrictions on exports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan;
(j) essential to the acquisition or distribution of products in general or local short supply; Provided that any such measures shall be consistent with the principle that all contracting parties are entitled to an equitable share of the international supply of such products.
Obviously, now that China applies the same export quota and export tariff to all its trade partners, the blame from the US and European Union is groundless.
In fact, the US and the European Union have set a very bad example in this respect. What they are now advocating conflicts with many measures they themselves practice.
It must be noted that the export control of these two parties are the widest as well as strictest in the world.
In 1949 when the People's Republic of China was founded, the US issued its NSC41 document with which it created a broad and rigid export control system against China.
The US not only enforced export controls on China during and after the cold war, but promoted the establishment of the Wassenaar Arrangement, the members of which enforced export controls on certain countries.
(The author is a senior researcher under the Ministry of Commerce. The views expressed are his own. He can be reached at http://meixinyu.blog.sohu.com)
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