Lecture Mock Exam 14.11.13 Dr. Juan C. Ochoa Postdoctoral Fellow, University of Oslo Faculty of Law/Norwegian Centre for Human Rights
This outline is aimed at identifying the issues to be discussed and some guidance on how to address them. It does not seek to provide any definitive answer. Part 1: General approach: Steps to analyze the legality of a restriction to market access for goods and services from other countries 1. Which type of measure is involved? 2. Which is the theme of the measure? 3. Whether an exception applies?
Which type of measure is involved? Types Border restrictions on Internal restrictions imports Sub-types tariffs: GATT, Art II Taxes: GATT, Art. III:2 Includes: Customs duties, Other duties and charges Non-tariffs barriers Regulations and requirements: GATT, Include: Art III:4 Quantitative restrictions: GATT, Art XI Other non-tariff barriers
Relevant distinction as different rules apply to different types of restrictions. Bossche, at 347: “Not always easy to distinguish an internal measu re from a boarder measure when the measure is applied to imported products at the time of importation.” - the role of an attorney: the extent to which you shall take into account potential arguments of the defendant - present the case to a panel: burden of proof
The case of the exam: Ad 1) – tariff reclassification a) Violation of prohibition of de facto discrimination under the MFN clause (Art. I:1 of GATT 1994) Reduced the tariff on one of the families of catfish while maintained the level of the tariff for the family mostly imported from Elbonia Application to the case of the test to determine whether there is a violation of the MFN obligation under Art. I:1 of GATT 1994: o Whether the measure at issue is covered by Art. I.1. of GATT 1994 Yes, a custom duty o Whether the measure at issue confers a trade ‘advantage’ Yes, a custom duty reduction o Whether the concerned products are ‘like products’ General factors to assess this: Physical characteristics of the products o Concerned catfish belong to different families; so, no identical physical characteristics End-uses of the products; o Identical Consumer s’ tastes and habits regarding the products in the defending State; o Majorian consumers are the relevant to assess this o Satisfied: according to the information provided, both families are considered as substitutable by consumers
tariff classification of the products by other member States to WTO o No information available What to do when the first general factor is not satisfied? AB: when the products have pronounced physical differences, the complaining member has a higher burden of proof to demonstrate the likeness of the products based on other relevant factors ( EC- Asbestos ). o Fourth req.: whether the advantage granted by the measure at issue is accorded ‘immediately and unconditionally to all like products concerned.’ The advantage is not accorded ‘immediately and unconditionally to all like products concerned ’ b) Violation of Article XXVIII entitled ‘modification of schedules’ Change of tariff classification - JCO’s assessment: this article is not breached o change of tariff could have been carried out without changing the schedule; o tariff for sisoridae catfish remains at the level set in the schedule of concession.
c) Violation of Article II entitled schedules of concession? - Art. II applies only in cases of “ less favourable treatment ” than the one set out in the schedule of concession o Not worth invoking this provision Ad 2) - Change of name of the catfish family mostly imported from Elbonia to “mud river shark” by a law Type of measure is involved: a law affecting the internal sale of the product Applicable provision: GATT 1994, Art. III:4 a) Violation of GATT 1994, Art. III:4 Application to the case of the relevant test o Whether the measure at issue is covered by this provision: Yes, a law affecting the internal sale of the product o Whether the imported product, Sisoridae , is ‘like’ other families of catfish, particularly local ones AB: concept of ‘like products’ in Art. III:4 of GATT 1994 is bro ader than the concept in Art. III:2, first sentence, because of the textual differences btw. these provisions ( EC- Asbestos , 2001)
Four general factors to assess this: the same as under the MFN obligation in Art. I of GATT discussed above Physical characteristics of the products End-uses of the products Consumers’ tastes and habits regarding the products in the defending State; and tariff classification of the products by other member States to WTO Stress, again, factors b) and c) o Whether there is less favourable treatment to the imported good New designation not previously known to Majorian consumers Negative connotations of “mud” and “shark” b) Violation of TBT Agre., Art. 2.1 – Discrimination Applicability of TBT Agre.: o Rules regarding terminology and marking requirements fall within the definition of technical regulation (TBT Agre., Annex 1) Application to the case of the relevant test: o Whether the concerned measure is a ‘technical regulation’ within the meaning of Annex 1.1. to TBT Agreement. Just analysed
o Whether the imported and domestic products at issue are ‘like products’ AB: a competition- based approach must be adopted to the determination of ‘likeness’ under Art. 2.1 of TBT Agre. ; rejected the Panel’s purpose -based approach to this. However, noted that regulatory concerns underlying a measure may be relevant to an analysis of the ‘likeness’ criteria under Art. III:4 of GATT 1994 and under Art. 2.1. of TBT Agre. to the extent they have an impact on the competitive relationship btw. and among the concerned products ( US - Clove Cigarettes , 2012, para. 119). Criteria to assess the ‘likeness’ of the imported and domestic products at issue under this provision are the same as those under Art. III of GATT 1994 ( US - Clove Cigarettes , 2012). o So, it is reasonable to argue that the imported and domestic products at issue are ‘like products’ o Whether there is less favourable treatment to the imported good AB considered the case- law on the term ‘treatment no less favourable’ in Art. III:4 of GATT 19 94 to be ‘instructive’ in assessing the meaning of the same term in Art. 2.1. of TBT Agre. ( US - Clove Cigarettes , 2012, para. 180) AB: there must be a genuine relationship btw. the measure at issue and the detrimental impact of competitive opportunities for imported products ( US – Tuna II (Mexico) (2012) , footnote 457 to para. 214). Need to analyse whether the detrimental impact on imports stems exclusively from a legitimate regulatory distinction ( US - Clove Cigarettes , 2012, para. 182; also para. 215). Assessment: New designation not previously known to Majorian consumers Negative connotations of “mud” and “shark”
There is a genuine relationship btw. the measure at issue and the detrimental impact of competitive opportunities for imported products Is there a legitimate regulatory distinction? Defending State has not demonstrated this. c) Violation of TBT Agre. Art. 2.2. – unnecessary obstacle to trade Application to the case of the relevant test: Whether the measure at issue is ‘trade - restrictive’ - i.e. ‘ having a limiting effect ’ on trade (AB, US – Tuna II (Mexico) (2012), para. 319). o Satisfied New designation not previously known to Majorian consumers Negative connotations of “mud” and “shark” Whether the measure at issue fulfils a legitimate objective o Note that the third sentence of TBT Agre. Art. 2.2. lists some examples of legitimate objectives o Defending State has not demonstrated this Whether the measure at issue is ‘not more trade - restrictive than necessary’ to fulfil a legitimate objective o As defending State has not demonstrated that the measure fulfils a legitimate objective, not need to analyse this requirement
Ad 3) – Countervailing duties (‘ CVD’) CVD are unlawful under GATT Art. VI, paras. 3 and 6, and the Subsidies Countervailing Measures Agre. (‘SCM’) Requirements to impose CVD under Art. 11(2) of SCM existence of (a) a subsidy injury within the meaning of Article VI of GATT 1994 as interpreted by this Agreement, and a causal link between the subsidized imports and the alleged injury The same requirements seem to apply under GATT, Art. VI, paras. 3 and 6 and the SCM provides guidance for the interpretation of relevant concepts Application to the case of the relevant test: - Is there a subsidy? Requirements for the existence of a ‘subsidy’ under SCM “financial contribution” or “any form of income or price support” o Actual or potential direct transfer of funds or even when there is a ‘government practice’ involving the transfer of funds (Panel, Brazil – Aircraft , para. 7.13) “financial contribution” or ”any form of income or price support” by a government or any public body
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