T RAINING P ROGRAMME F OR T HE G OVERNMENT O F I NDONESIA The TBT Agreement Jogjakarta, Indonesia 26-29 March 2019
SCOPE OF THE TBT AGREEMENT TRADE IN GOODS GATT 1994 TBT Agreement lex specialis
SCOPE OF THE TBT AGREEMENT The TBT Agreement applies to the following measures: ▪ Technical Regulations ▪ Standards ▪ Conformity Assessment Procedures
DEFINITION OF A TECHNICAL REGULATION ▪ Document which lays down product characteristics or their related processes and production methods , including the applicable administrative provisions, with which compliance is mandatory . It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.
SUMMING UP Product characteristics Applies to an or their related identifiable processes and product production methods Technical regulation May deal exclusively with Mandatory packaging, labelling compliance
WHEN IS A TECHNICAL REGULATION MANDATORY? ▪ View 1 : Only if non-compliance leads to inability to market the product. ▪ View 2 : If , for any given activity or type of statement, it must be complied with; but you can still market the product. Example: US – Tuna II (Mexico) → If you want to say anything about dolphin safety, you must follow certain conditions. But you can still market tuna that is not dolphin-safe.
EXERCISE EXERCISE ▪ A measure that imposes a labelling requirement on sardines. ▪ A measure that bans asbestos fibres. ▪ A measure that bans cigarettes that contain flavours. ▪ A subsidy to agricultural products. ▪ A dolphin-safe label on tuna products. ▪ A measure that bans products that contain asbestos. ▪ A measure that imposes a country-of-origin label on meat. ▪ A tariff on bread. ▪ A measure that imposes that meat products must be produced from animals that have been humanly killed.
WTO CASE LAW • A measure that imposes a labelling requirement on sardines EC – Sardines • A measure that bans cigarettes that contain flavours US – Clove Cigarettes • A dolphin-safe label on tuna products US – Tuna II (Mexico) • A measure that bans products that contain asbestos EC – Asbestos • A measure that imposes a country-of-origin label on meat US – COOL
MAIN OBLIGATIONS UNDER THE TBT AGREEMENT If a measure is a technical regulation, then it falls under the scope of the TBT Agreement. ▪ Article 2.1 → Non-discrimination obligations ▪ Article 2.2 → Prohibition of unnecessary restrictions ▪ Article 2.4 → Use of international standards
Article 2.1 of the TBT Agreement Non-discrimination obligations
NON-DISCRIMINATION OBLIGATIONS Article 2.1 of the TBT Agreement: Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country. national treatment most-favoured-nation
NON-DISCRIMINATION OBLIGATIONS NON-DISCRIMINATION OBLIGATIONS Elements of Article 2.1 of the TBT Agreement: ▪ The measure must be a " technical regulation "; ▪ Imported and domestic products must be " like products "; and ▪ Imported products must receive " less favourable treatment " than like domestic products.
NON-DISCRIMINATION OBLIGATIONS NON-DISCRIMINATION OBLIGATIONS Imported and domestic products must be like products: ▪ Same 4 criteria traditionally followed under Art. III:4 of the GATT (physical characteristics, end-uses, consumer tastes and habits, and tariff classification). Competition-based approach.
NON-DISCRIMINATION OBLIGATIONS Less favorable treatment There is a detrimental impact on the conditions of competition of imported products. However: what if there is a legitimate reason? Under the GATT → Article XX general exceptions Under the TBT Agreement → No exceptions provision Appellate Body : Article 2.1 of the TBT Agreement does not prohibit a detrimental impact on imports that "stems exclusively from a legitimate regulatory distinction ".
CASE LAW US – Clove Cigarettes : • Objective: to reduce youth smoking. • Flavoured cigarettes are appealing to young people. • Clove cigarettes are banned. • Menthol cigarettes are also flavoured and appeal to young people. • Like product, but not banned. • No legitimate regulatory distinction. • Violation of 2.1
CASE LAW US – Tuna II (Mexico) : • Objective: discouraging the purchase of certain tuna caught in a harmful way for dolphins. • Tuna caught in the Eastern Tropical Pacific Ocean (ETP) may bear the label if there is certification that no dolphin was killed. Tuna caught outside the ETP may bear the label without certification. • The measure is not "calibrated" to the risks in different areas of the ocean. • No legitimate regulatory distinction → violation of 2.1
Article 2.2 of the TBT Agreement Prohibition of "unnecessary restrictions"
PROHIBITION OF "UNNECESSARY" RESTRICTIONS Article 2.2 of the TBT Agreement: • Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. • For this purpose, technical regulations shall not be more trade- restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. • Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. [ … ]
PROHIBITION OF "UNNECESSARY" RESTRICTIONS Elements of Article 2.2 of the TBT Agreement: ▪ The measure must be a technical regulation ▪ Identification of the objective ; ▪ Whether the objective is legitimate ; ▪ Whether the measure is more trade-restrictive than necessary .
PROHIBITION OF "UNNECESSARY" RESTRICTIONS Identification of the "legitimate objective" ▪ Article 2.2 provides examples of legitimate objectives: national security requirements; the prevention of deceptive practices; and the protection of human health or safety, animal or plant life or health, or the environment. • US – Tuna II (Mexico) : give information to consumers on how tuna was caught and protect dolphins by discouraging the purchase of certain tuna caught in a harmful way for dolphins. • US – COOL : provide consumer information on where the animal from which the meat is derived was born, raised and slaughtered.
PROHIBITION OF "UNNECESSARY" RESTRICTIONS PROHIBITION OF "UNNECESSARY" RESTRICTIONS "More trade-restrictive than necessary" Degree of trade-restrictiveness of the measure Degree of contribution made by the measure to its objective Nature of risks and gravity of non-fulfilment of the objective Comparative analysis Is there a less trade-restrictive alternative measure? If not, the measure is consistent with Article 2.2.
CASE LAW ▪ It is for the complainant to propose an alternative measure. ▪ The alternative measure must make an equivalent contribution to the objective pursued. ▪ In US – Tuna II (Mexico) , the AB reversed the Panel's finding of inconsistency with Article 2.2 because the alternative contributed to the objectives "to a lesser degree than the measure at issue" → No inconsistency with Article 2.2.
AGENDA ▪ Use of international standards – Article 2.4 of the TBT Agreement ▪ Standards ▪ Are private standards disciplined under WTO law? ▪ Conformity Assessment Procedures ▪ Relationship of the TBT Agreement with the GATT 1994 and the SPS Agreement
Use of international standards Article 2.4 of the TBT Agreement
BASIC IDEA OF HARMONIZATION BASIC IDEA OF HARMONIZATION
USE OF INTERNATIONAL STANDARDS Article 2.4 of the TBT Agreement Where … relevant international standards exist or their completion is imminent, Members shall use them , or the relevant parts of them, as a basis for their technical regulations ... Except if: such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued, for instance because of fundamental climatic or geographical factors or fundamental technological problems.
USE OF INTERNATIONAL STANDARDS Elements of Article 2.4 of the TBT Agreement: 1. Does a relevant international standard exist ? 2. If yes: has the relevant international standard been used as a basis for the measure? 3. If not used as a basis: is the relevant international standard " inappropriate or ineffective " to achieve the legitimate objective pursued?
IS THERE AN INTERNATIONAL STANDARD? INTERNATIONAL STANDARD ▪ Annex 1.2 of the TBT Agreement defines "standard" as a "document … that provides, for common and repeated use, rules, guidelines … with which compliance is not mandatory . ▪ Annex 1.5 to the TBT Agreement defines an "international body" as a body "whose membership is open to the relevant bodies of at least all Members ". EC – Sardines : Codex Stan 94 – YES . US – Tuna II (Mexico): Agreement on the International Dolphin Conservation Program – NO . States had to be invited to join.
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