96. China’s export duties and export quotas on these products are not necessary to protect human, animal, or plant life or health. According to China, the production of coke, magnesium metal, manganese metal, silicon carbide and zinc results in environmental pollution, which in turn results in risks to health. China argues that its export duties and quotas on coke, magnesium metal, manganese metal, silicon carbide and zinc result in less production of these products in China, and therefore, less pollution. With respect to magnesium scrap, manganese scrap, and zinc scrap, China contends that the export duties on scrap products promote a more steady supply of scrap products within China to encourage a decrease in primary production in favor of more environmentally friendly, scrap-based, production. For the reasons we will discuss today and in our second written submission, China’s arguments are fundamentally flawed.
97. China argues that it has an interest in improving environmental protection, an interest that many WTO Members undoubtedly share. However, the exportation of the products at issue is, in fact, entirely unrelated to environmental pollution. As China itself argues, it is the production of these products, not their export, that causes pollution. Thus, restraints on the export of the products at issue bear no direct relationship to China’s environmental goals, nor are they, by any measure, “necessary” to accomplish those goals. The restraints, however, do have a direct economic effect in terms of meeting China’s economic goals of providing a competitive advantage to its industrial users of raw materials. As complainants explained, China’s export duties and quotas are part of an effort to secure a steady supply of important raw materials for its manufacturing industries in order to encourage their shift to higher, value-added manufacturing.
Here's the key point. Let's say there is a product that causes pollution and is bad for human health. Can an export restriction be justified under Article XX(b), or should you only be allowed to ban production?
