Canada, A Third Party In WTO Panel On Chinese Raw Materials Export Restrictions
By: Ainsley Brown
Canada now joins a score of other nations, including Brazil, Japan, Norway, India and Turkey, as third parties in a World Trade Organization (WTO) panel on China’s export restrictions on certain raw materials.
A WTO panel is the third step established under the Dispute Resolution Understanding (DSU) – the DSU being the lynchpin that transformed the General Agreement on Tariffs and Trade (GATT) in to the WTO – to settle disputes between member states. The first step being the complaint-consultation stage, where a member or members make a formal complaint to the WTO’s Dispute Settlement Body (DSB) and request consultations with another member state or member states that they believe have violated WTO rules or specific commitments.
The complaint-consultation stage allows members to attempt to reach a negotiated settlement while at the same time gearing up for the panel stage, if no settlement can be reached. Basically, in this stage of the dispute settlement both parties learn of the policy reasons and choices that underlie both the complaint and the alleged violation that lead to it.
The United States, the European Union and Mexico moved very rapidly out of the complaint-consultation stage to the next two phases of dispute resolution. Under the DSU once the second stage complaint-consultation stage fails to resolve the dispute within 60 days the complaining party may move to the second stage by requesting the establishment of a panel. This request must specifically identify the measures complained of or are so intimately connected with one or more measure as to sufficiently give notice to the other party or parties, otherwise it will be excluded from consideration by the panel.
The third stage is the actual establishment of a panel and this is where we find ourselves. The panel was establish on Dec 21, 2009 and at issue is China’s export restrictions (export quotas and duties) on particular raw materials, including zinc, magnesium, bauxite, manganese and coke. These export restrictions, it is alleged, distort world markets in these commodities and therefore not violate WTO export restrictions rules but China’s specific export duty commitments on joining the WTO.
Canada for its party is not a party to the dispute but because some of the commodities in question are key Canadian exports it does have a interest in the outcome of the case in so far that it wishes to see the distortions in markets for these commodities eliminated. As a third party Canada’s rights in the case are very restricted. It has no right to any part of an award, if one is awarded and as a third party it only has the right to make written but not oral submissions before the panel. The however has a duty to take Canada’s and other third party views into account its its report.
Finally, Canada, as a third party, as no right of appeal before the Appellate Body (AB) – the AB being the WTO’s “court” of last resort – however, it does have the right to make further written submissions before the AB if a party does appeal.
For a full out line of all the stages of the WTO dispute resolution process click here.
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