The China - Rare Earths WTO panel report was circulated yesterday. What's jumping out at me in the report are some really interesting systemic issues.
First, there is some good stuff about the role of precedent, and when a WTO panel might depart from prior Appellate Body reasoning (which some might call "precedent," but we have to be careful with that word in the WTO context). (Paras. 7.53-61)
Then we've got a good discussion of the relationship of GATT Article XX and Paragraph 11.3 of China's Accesstion Protocol. Can Article XX serve as a defense here? There's a majority opinion (paras. 7.73-117) and a separate opinion by one panelist (paras. 7.118-138).
And then there's this:
7.664. It is well settled that discrimination can also be arbitrary or unjustifiable where alternative measures exist that would have avoided or at least diminished the discriminatory treatment. In the context of conducting an analysis under the chapeau of Article XX of a measure provisionally justified under subparagraph (g), the Appellate Body has examined whether a WTO-consistent or less trade-restrictive alternative would be available and would enable the regulating Member to achieve its legitimate policy goals with the same degree of efficiency and efficacy.990 The Panel will review first the arguments of the complainants in this respect and those of China, and will follow with our own analysis.
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990 Appellate Body Reports, US – Gasoline, pp. 25-29, DSR 1996:I, 3, pp. 23-27, and US – Shrimp, para. 171 ("The Inter-American Convention thus provides convincing demonstration that an alternative course of action was reasonably open to the United States for securing the legitimate policy goal of its measure a course of action other than the unilateral and non-consensual procedures of the import prohibition under
Section 609".).
Looking at alternative measures under the chapeau can be confusing if you are also looking at them under the Article XX sub-paragraphs (not the case here, because it was Article XX(g)). What exactly is the role of alternative measures under the chapeau? If less discriminatory measures are available, is that conclusive proof of arbitrary or unjustifiable discrimination? Or is it just one piece of evidence on the issue?
