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MGR WTO Sessions 2013

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Manuel Gimenez

on 18 May 2015

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Transcript of MGR WTO Sessions 2013

MFN - NT-
Tariffs - NonTB
Unfair Trade
General Exceptions


Principles of non discrimination:
Most Favoured Nation Treatment
MFN under GATT 1994: Advantage, Likeness, Unconditionality
MFN under GATS: Coverage, likeness, effective violation. Exceptions
National Treatment
Tariff and Customs Law
Rules on market access
Schedule of concessions
Rules of Origin
Other Charges and Duties
QR
Other

Introduction

Art. I GATT 94
1. Confers advantage
2. Products are “like products”
3. Granted immediately and unconditionally to all like products
Other mentions in
GATT: Art III.7, Art V, Art IX:1, Art XIII, Art XVII, Art XX

Besides MFN and NT: X(3)a GATT 94: uniform and impartial application of domestic laws, regulations and judicial decisions
A “cornerstone” of WTO and international trade, vs of regional agreements: Preferential treatment
Art. I Both de iure and de facto discrimination
Canada Autos
Safeguard measures, antidumping and countervailing duties, also included
However: Subsidies to domestic products are excluded

MFN under GATT


Article I:1 requires that "any advantage, favour, privilege or immunity granted by any Member to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other Members."

Article I:1 refer not to some advantages granted "with respect to" the subjects that fall within the defined scope of the Article, but to "any advantage"; not to some products, but to "any product "; and not to like products from some other Members, but to like products originating in or destined for "all other " Members.

A measure that confers advantage


Likeness is relative (Japan Alcoholic beverages). Questions to solve. Can vary from one case to another.

Spain – Unroasted coffee.

Indications: characteristics, uses, tariff regime
Consumer tastes and habits are relevant unlike non-product related processes
Applicable to bound a and un bound tariff items



Like products
Canada Autos:

Article I:1 must be interpreted to mean that subjecting an advantage granted in connection with the importation of a product to conditions not related to the imported product itself is per se inconsistent with Article I:1, regardless of whether such conditions are discriminatory with respect to the origin of products.
Article I:1 violation depends on whether an advantage discriminates with respect to the origin of products.

EC – Tariff preferences:
EC’s argument: "conditionality" in the context of traditional MFN clauses equals that of bilateral treaties which relate to conditions of trade compensation for receiving MFN treatment
Panel’s response: much broader meaning. It should mean “not subject to any conditions”


Advantages granted immediately and unconditionally

Art. II:1 GATS: Nature of MFN obligation
Discrimination between like service and service suppliers from different countries
Both de facto and the iure
Arts VII, VIII, X, XII, XVI, XXI and also to general exceptions (Art XIV)
Test of consistency
Is the measure covered by GATS? (by a ME and affecting services)
"Affecting services" broad definition (Bananas III). Art XXVIII(c)
“affecting trade in services” include (i) the purchase, payment or use of a service; (ii) the access to and use of, in connection with the supply of a service, services which are required by those Members to be offered to the public generally; (iii) the presence, including commercial presence, of persons of a Member for the supply of a service in the territory of another Member;
Both service and service suppliers to be considered “like”
Like services: consumer habits, UN Central Product Classification. Few relevant provisions.
Like suppliers: size, assets, technology used
Is there less favourable treatment? (Art XVII GATS)
Both de facto and de iure: Bananas III . EC revised license allocation systems prejudiced Ecuador and EC failed to rebud this presumption

MFN under the GATS

Exceptions from MFN under GATS
Prior to 1995: Notifications re Art II.
Business services, transport, communications
Should have been over by 2005
Services Council carries out policy reviews


Cross border: (a) from the territory of one Member into the territory of any other Member;
Consumption abroad: (b) In the territory of one Member to the service consumer of any other Member;
Commercial presence: (c)by a service supplier of one Member, through commercial presence in the territory of any other Member. Clarified in Mexico Telecoms any kind of business or professional establishment in the territory of the other ME
Presence of natural persons: (d) by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member.


Art. I:2 GATS Types of service

Market access is restricted in two ways: tariff and non-tariff barriers
Tariff: financial charge in the form of a tax imposed by and because of importation: specific (amount), ad valorem (%, indexed), mixed
Custom Tariff: list of all customs tariffs following the Harmonised System
Not prohibited: Art XXVIII GATT recommends reduction and Art XXXVII GATTT calls upon developed countries to accord barrier elimination to developing countries
Developing countries, still high tariffs. Tariff escalation: Is that positive?
Negotiations under reciprocity/equivalent value and MFN principle
Enabling clause for developing countries
Finally in Uruguay Round, developing countries agreed to reduce tariffs (related to tariff escalation)
Other forms of negotiation: linear reductions, harmonisation formula, sector approach, Swiss formula
Other sectorial agreements: Doha – Agreement on Trade in Information Technology
Rules on market access
EM bound by their schedule. Protection of the Tariff :
II.1.a GATT. No less favourable treatment
II.1.b. No tax in excess.
Also applies if different taxation. No per se discrimination
Key issue: interpretation: LAN case (EC-Computer equipment).

How to impose custom duties
Relevant elements:
Classification, value, origin
Classification. HS non mandatory.
Spain Unroasted coffee
: Likeness
Valuation.
Art VII GATT 1994, Note Ad Article VII, WTO Agreement on the Implementation of Art VII of the GATT 1994
Transaction value -> Identical goods, deductive value (unit price), computed value method (all costs and profits).
Never use goods produced in the importing country

Modification or withdrawal of tariff concessions: two systems: Initial Negotiating Rights (INR) and Principal Supplying Interest
In all cases: Compensation or retaliatory measures
Water: difference between tariff concession and custom duty

Tariffs and the schedule of concessions
In addition to the classification and value, it is relevant to determine the origin of imported goods
In spite of MFN
Not homogeneous, despite Agreement on
Rules of Origin (WTO Annex 1A).
First approach: Value added system > 50% of the value of the good
Methods to determine the origin of imported goods
Change in tariff classification
A number of policies discriminate between exporting countries: quotas, preferential tariffs, anti-dumping actions, countervailing duty (charged to counter export subsidies)
No rules under GATT 1947 or GATT 1994 but consensus on the need for such disciplines resulted in WTO Agreement on Rules of Origin
Aims for common (“harmonized”) rules of origin among all WTO members, except in some kinds of preferential trade — for example, countries setting up a free trade area are allowed to use different rules of origin for products traded under their free trade agreement.

“Made in ...”: Rules on Origin

Art II.1(b), other duties are not defined, but described. Parties can only impose them when properly recorded in their Schedules.
Yet, only applies to goods
Exceptions to the inscription requirement:
Border tax adjustment: compensation to equal domestic tax
WTO consistent anti-dumping or countervailing duties
Fees or charges commensurate the cost of the services rendered


Other charges and duties

Quantitative restrictions (QR)
A measure that limits the quantity of a product that may me imported or exported.
Types: prohibition, quota, licensing. Tariff Quotas (usual in agriculture) are not strictly QR
Why is there
a preference for custom duties
Transparency
QR also raise the price of imports: "Quota rent"
QR imposes absolute limits
Rules on QR
Generally prohibited, Art XI:1 GATT 1994.
Broad application: export quotas or minimum prices (China Autos, China Raw Materials); both border measures and with a limiting effect (India-Autos, US-Shrimp); not only regulations, "measures" broadly (Japan-Semiconductors); de facto restrictions (Argentina-Hides and Leather)
Voluntary Export Restraints: Specifically prohibited by the Agreement on Safeguards

Exceptions to the prohibition:
Differential treatment for DC and LDC
Art. XI:2.a. Temporarily and for essential products. China Raw Materials.
QR in Agriculture (Agreement on Agriculture) and Textiles and Clothing (ATC)

Administration of QR (Art XIII GATT 1994)
Need to handle the many exceptions
MFN-like Clause: Bananas III, EEC- Apples I (Differences in Transparency , way restrictions are administered, negotiated or unilateral)
Distribution of trade in absence of any limitation
Specific quotas for countries with a “special” interest
Import licensing: non discriminatory [EC Poultry]
Agriculture and Clothing: Specific rules and tariffication (Multifibre Agreement)

Non tariff barriers to trade in goods
Any other government imposed and sponsored actions and omissions that restrict trade.
Goods: QR + others
Services: Market access barriers + others
TBT and SPS
Lack of protection of IP Rights
Significant role in public health, consumer safety and environmental protection. Eliminate discrimination and protectionism.

Non tariff barriers to trade in goods



Schedule of concessions: all bindings of each Member
Interpretation: LAN Case. AB required that US asked EC for clarification upon approval (reverse legitimate expectations approach).

Use of rules of origin:
to implement measures and instruments of commercial policy such as anti-dumping and safeguard measures;
to determine whether imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment;
for the purpose of trade statistics;
for the application of labeling and marking requirements; and
for government procurement.

Other barriers (Art. X GATT)
Lack of transparency
Unfair and arbitrary application of trade measures
Custom formalities
Government procurement
Administration of QR (Art XIII GATT 1994)


Principles on non discrimination
Concept of trade in services
Canada Autos.
Trade in the sense of Art I:2 .
Affection in the sense of Art I:1, upon the conditions of competition in supply of a service
Like service of like service suppliers
Interpretive value of MFN treatment under Art II GATS
Scant decisions covering the issue
Consider all factors: characteristics, classification under UN Central Product Classification Service (CPC), consumer habits
Treatment no less favourable: Art XVII.2 / XVII:3
2. A Member may meet the requirement of paragraph 1 by according to services and service suppliers of any other Member, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Member compared to like services or service suppliers of any other Member.

National Treatment under the GATS

National Treatment under the GATS

Art XVII GATS lacks general application to all services unlike Art III GATT
Schedule of Specific Commitments vs. Schedule of Concessions
Only sectors inscribed and subject to conditions, limitations and qualifications
Certain sectors and certain modes of supply (cross-border, consumption abroad, commercial presence, presence of natural persons)
Typical limitations:
Nationality or residence requirement for executives in service provider companies
Requirement to invest certain amounts in local currency
Restrictions to purchase land
Tax privileges for local suppliers
Different capital requirements
Developing countries have very limited commitments: Doha outcome
Test under Art XVII GATS
The measure is related to a sector and mode of supply covered by the Specific Commitments
The measure affects to like services or like service suppliers
The measure constitutes less favourable treatment

Art. III GATT 94 and
Note ad Art. III GATT
1. A measure that confers advantage
2. Products are “like products”
3. The advantage is granted immediately and unconditionally to all like products
Art III does not affect to
1. Government procurement (Art III.8(b))
2. Subsidies to domestic producers (Art III.8(b))
Other multilateral agreements also require NT
Objectives of Art III
1. Avoiding protectionism
2. Equality of competitive conditions
Protecting expectations
Not undermining commitments under Art. II
AP Japan – Alcoholic Beverages: Broader scope: Also products that are not bound, protection of tariff concession should not be overemphasized (as opposed to NT- GATS)
1. Art III.1 general principle
2. Art III.2 internal taxation: (i) like products; (ii) substitutable products
3. Art III.4 internal regulation
Both de facto and de iure measures. The case of higher taxes in vodka than in shochu, both national and foreign is a clear example


National Treatment on
Internal Taxation and Regulation

Note ad Article III. It will be considered internal any measure that would apply to both domestic and foreign products even if applied in the border

Article I:1 refer not to some advantages granted "with respect to" the subjects that fall within the defined scope of the Article, but to "any advantage"; not to some products, but to "any product "; and not to like products from some other Members, but to like products originating in or destined for "all other " Members.

Is there any relation between Art. III and Art XI GATT?
India Autos: A measure that affects competitiveness and opportunities for importation, could be examined through both lens

Measures covered under Art. III: Border or internal
Double test: (i) like products (ii) taxation in excess
Art III.1 provides that internal taxation should not protect internal production
Art III.1 refers to “protectionist aim”.
The lack of such principle in Art.III.2 means that taxation in excess is merely a manifestation of Art III.1 protectionist aim. [AP Japan-Alcoholic Beverages]
Taxes covered:
Internal taxes in products. VAT, etc.
Art III excludes: Border Tax Adjustments that fall under Art III.2 thus will not be prohibited unless they do not violate Art III.2
Relevance of the regulatory outcome when evaluating compliance with Art III.2
A measure preventing imported products from being sold in a manner that facilitated tax evasion (and implied higher taxes) fell under Art III.2 (US-Malt Beverages)

NT – Internal Taxation
Art. III.2.Par1

Like Products: Imported and domestic shochu (vodka) / Shochu v. Vodka
Narrow construction Working Party on Border Tax adjustment (1970)
Case by case analysis
Quality as a relevant factor: Dominican Rep – Import and sale of cigarettes
Aims and Effect Approach: Wine in US- Malt-Beverages: Analysis of the intention to protect domestic producers
Taxes “in excess of”
No de minimis rule or trade effect
Relevant elemnts: taxation method, rules for tax collection
When the difference comes from RoO or nationality  necessary violation of Art III.2
When products are not like Products: directly competitive or sustituable products
Are products directly competitive or substituable? Shochu/soju & Vodka/whisky
Do they have dissimilar taxation?
Difference in taxation needs to be appreciated: de minimis rule
Is the dissimilarity aimed at protecting domestic products?
Japan AB: structure, architecture application…
Interpretative use of regulators’ intent: Issue on how the measure is applied, no matter what the intention was
NT – Internal Taxation:
Directly competitive or substitutable products
Art III.2.Par 2

Art III.4 Foreign products should be accorded treatment no less favorable in respect of all laws regulations and requirements affecting their internal sale, offering, purchase, transportation, distribution or use;
Similarly to Art.III.2, the absence of a mention under Art III.4 to (i) Art III.1, or (ii) “protectionist aim", signifies that NT violations due to regulations do not require a separate consideration of whether a measure affords protection to domestic production.
Three tier consistency test:
Law, regulation or requirement covered under Art III.4
All regulations affecting trade
Does it Include procedural regulations?
Includes measures that do not “directly” affect trade? In Canada Auto, provision that requested to comply with certain “added value” on autoparts had an impact in distribution on trade  also affects measures with an equivalent effect
Includes measures that apply to isolated cases only
Taxes are included under Art III.4 when they can affect how trade normally works: Mexico-Taxes in soft drinks
Like products
Less favorable treatment



NT – Internal regulation

Three tier consistency test:
Like products
Likeness differ from Art I.1 and Art III.2
EC – Asbestos.
Necessarily differentiate likeness under Art III.2
That provision includes “directly competitive or substituable products “
The lack of distinction + necessity of consistency between Art III.1 / Art III.2 /Art III.4
Art III.4 must help comply with the purpose of “equality of competitive conditions” for all products in a competitive relationship thus broader protection
Case by case: not all degrees of competition (Asbestos)
Thus: broader than Art III.2 first sentence, but not broader than Art III.2 jointly
Asbestos: How to determine likeness in light of Art III.4 Working party on border tax adjustments
Important critique: EC appeal likeness and health!
Importance given to uses and habits, especially when products look different
BoP
Regulatory intent discredit after Japan – Alcoholic Beverages
Processes with no impact in the product: irrelevant US-Tuna
NT – Internal regulation

Three tier consistency test:
Treatment no less favorable
2nd element still necessary
Asbestos not directly examined. Linked to Art III.1, avoid protection to domestic prod
Formally different treatment Korea Beef .
‘Overall’ treatment less favourable treatment cannot be compensated
Factors unrelated to the foreign origin: Need to explain that any less favourable treatment comes out of the foreign origin of the product.




Like products in
NT – Internal Taxation

NT – Internal regulation

National Treatment
Tariff and Customs Law
Art. I GATT 94
1. Confers advantage
2. Products are “like products”
3. Granted immediately and unconditionally to all like products

Article II GATS
II.1
II.2.Par1
II.2.Par2
II.4


MFN Treatment
MFN under the GATS
Trade must be fair and not only “international”: cartels, price fixing abuse of a dominant position…
WTO does not provide rules on unfair trade; but on dumping and subsidies
Dumping
Export prices below normal value of the product.
Not prohibited under WTO. But condemned if it causes damage to other territory
Target of measures: China (& others)
“Frigde War”: electric goods in EU market on Korean imports
Offered to “once protected sector” when barriers are levied
Harmful to domestic manufacturers in the importing country
Subsidies
Government financial contribution to domestic traders
Benefit specific players, industries or sectors


Rules on Unfair Trade
Basic elements
Art VI and Agreement on Implementation of Article VI (ADA)
Substantive and procedural rules to “remedy” dumping
To be interpreted according to GATT
International price discrimination: export price is lower than the price for like products in the exporting country
ADA Art. 1. Investigation system
Injurious dumping: (i) price discrimination; (ii) damaging domestic like products; (iii) causality
Determination of Dumping
Normal value: Exporter home country for consumption .
Likeness: Art 2.6 Identical or, if not, close characteristics.
Avoid monopoly and non-market economies
At the same level of trade: factory, intermediaries, etc.
Alternatives Art 2.7 ADA
Using a 3rd country or constructing the figure
Export price (or construction)
Art 2.4 Comparison. Most contentious part
Consider Allowances: difference on conditions and terms of sale, taxation, levels of trade, etc.
Question: what happens if there is a bankruptcy? Reasonable anticipation
Calculation of margin
Weighed average or transaction to transaction comparison of differences

WTO Law on Dumping
Domestic Injury
Originated by like product
Provides authorisation to request an anti-dumping investigation
Diffuse scope: collective production, Industries, sectors, etc. just “one” major proportion
Determination of the injury: Objective and Positive. Exclusion of non dumped exports
Material Injury. Art 3. Substantive obligations:
(a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and
(b) the consequent impact of these imports on domestic producers of such products.
Threat of a material injury: facts and not merely on allegation, conjecture or remote possibility
Material retardation of domestic industries



Law on Dumping
1. Domestic Injury
2. Determination of the injury: Objective and Positive. Exclusion of non dumped exports
Demonstration of a casual link
Examination of all relevant evidence (Art 3.4 ADA)
Art 3.5 ADA: Non attribution requirement:
examine any known factors other than the dumped imports injuring the domestic industry, (not be attributed)
May be relevant: the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and productivity of the domestic industry.
US- Hot Rolled Steel, Korea Certain Paper, Mexico Pipes and Tubes: Need to show how those factors do affect the complaining party, separating among each of their impacts. This reversed the case law of US-Norwegian Salmon]

Law on Dumping
Article 5 ADA: “initiation request”, submitted by or on behalf of the industry
evidence of (a) dumping, (b) injury within the meaning of Article VI of GATT 1994 as interpreted by this Agreement and (c) a causal link
Keep secret, inform the investigated country: Not applicable to “Public Notice” ex. Art 12.2
Period of investigation
Mexico – Antidumping in rice: Period Chosen more than 15 months before the initiation of the investigations. Also discontinued periods
Violations of Art 3.1 ADA imposing “objective examination of all possible evidence”.
Minimum : 3 years data, up to 18 months investigation
Conduct of investigation
Art 6 ADA sets the rules. [EC-Tube or pipe fittings stated that Art 6 constitutes a due process rule, providing rights to parties]
All parties must have the opportunity to see and evaluate relevant information in writing
Balance of interests under Art 6.5 and 6.5.1 ADA: competitive disadvantage should be avoided providing all interested parties due respect to their confidentiality necessities
Importance of “first hand information” over “second best info”: Value of lack of response of the investigated parties  no positive assumptions: [Important: US-Hot Rolled Steel, AB para 99]
Mexico –Corn Syrup [Panel, 7.74] difference
Independent Judicial review where legally binding Art 13 ADA [EC] + Due public notice



Law on Dumping
Imposition of measures
Provisional
Preliminary affirmative conclusion + prevent injury from being caused + at least 60 days after the beginning of the investigation + Max 6 months
Preferably deposits or security
Imposition and collection
Optional: liable countries to their citizens (¿?)
Non discriminatory: as long as possible, each exporter (even from the same country) should have specific duties
“New shippers” should be promptly reviewed
Lack of retroactivity except (i) the importer was or should have been aware of the existence of dumping; (ii) massive dumping over a short period of time that would undermine any remedial effect of the definitive measures
Duration: renewable, up to 5 years [Art 11 ADA]
Price undertakings [Art 8]


Law on Dumping
Types of Subsidies
Prohibited subsidies.
Export subsidies . Art 3 SCM. Contingent, de facto and de iure, wholly or as one of several conditions, on export performance. A detailed list annexed to the SCM. Higher burden for de facto contingency
Local content or import substitution subsidies. contingent upon the use of domestic over imported goods. Prohibited as designed to directly affect the interests of other Members.
Remedies (multilateral): Specific rules, modifying DSU. Immediate withdrawal .
In one case: Australia-Automotive Leather: request to repayment of subsidy
Actionable subsidies
Only prohibited if they cause injury, impairment of benefits or serious prejudice (including threat)
Injury: the only that legitimates countervailing measures (i) caused to like products; (ii) domestic –to “a” major proportion of local industry; (iii) either material, threat or retardation of industry.
Analysis of the injury, under several joint investigations, has to be assessed cumulatively (over certain thresholds)
Casual link
Nullification : tariff concessions neutralized
Serious prejudice: displacement or impediment of imports or prices due to 3rd Member subsidizing
Remedies (multilateral): 6 month removal after DSB Report or compensation  otherwise: DSB authorises CV
Non actionable: generic and agricultural subsidies (Art 13 Agreement on Agriculture):
Special rules for agricultural products (till Jan, 2003).
Export subsidies in conformity with AA are not prohibited, although remain countervailable.
Domestic supports in conformity with AA are not actionable multilaterally, but countervailable.
“Peace Clause”: Domestic supports within “green box” AA are not actionable multilaterally nor are they countervailable.




Subsidies and countervailing measures

Financial Contribution
Government contribution
Benefit
Art 14 SCM
When does a loan, an equity infusion or the purchase by a government of a good confer a benefit? (Canada – Aircraft): benefit is to be determined by comparison with the market-place (i.e., on the basis of what the recipient could have received in the market).

Specificity
Basic principle : subsidy must distorts the allocation of resources within an economy to be subject to discipline. (De facto and de iure)
Types of “specificity” within the meaning of the SCM Agreement:
Enterprise-specificity. A government targets a particular company or companies for subsidization;
Industry-specificity. A government targets a particular sector or sectors for subsidization.
Regional specificity. A government targets producers in specified parts of its territory for subsidization.
Prohibited subsidies. A government targets export goods or goods using domestic inputs for subsidization.
Subsidies and countervailing measures

Subsidies is a legitimate instrument to pursue public policies
Strategic sector subsidies have generated noteworthy disputes
Regulation: Art VI / XVI GATT and SCM Agreement
Tokyo Round Subsidies Code (plurilateral)  Uruguay Round: SCM Agreement
Agreement on Agriculture
Concept of subsidy: Article 1.1 SCM 1) a financial contribution by a government or any public body within the territory of a Member, and 2) a benefit is thereby conferred.

Financial Contribution
After large debate: SCM requires a charge on the public account and contains an open list : grants, loans, equity infusions, loan guarantees, fiscal incentives, the provision of goods or services, the purchase of goods.
US-SFC [AB para 90]: government revenues forgone also constitutes a financial contribution; US Softwood Lumber III: permission to harvest certain trees constituted financial contribution as “standing timber”
Government contribution
The direction of a government or any public body. SCM Agreement applies to measures of sub-national governments and of such public bodies as state-owned companies.
Entrustment: responsibility and directions granted to private bodies






Subsidies and countervailing
measures


Special Treatment for developing countries
EC Bed Linen: No obligation to accept or propose constructive remedies
Standard or review in disputes
DSU Rules
Review of accuracy of the evidence before the investigating authority
Panel must accept the conclusions of the investigating body when there is an interpretation in PIL that would find authority’s measure in conformity with ADA



Law on Dumping
Countervailing measures
Prohibited and actionable subsidies, that cause injury to domestic industry and with a causal link
Target: any product of the subsidizing Member
Conduct an investigation: Largely similar to Anti-dumping
Upon request or on the own accord of the investigating authority in certain cases  full notice shall be given to all parties
Important role of collaboration (and lack of) and available sources to the investigating authority
Application
Provisional: upon declaration. Investigation shall be concluded even if the investigated Member accepts undertakings
Definitive measures
Price undertakings
Multilaterally sanctioned measures under DSU
MFN applicable
Countervailing duties are compatible with multilateral procedures: but both will not be applied at once

Subsidies and
countervailing measures
Trade liberalization often conflicts with other values and interests: promotion and protection of public health, consumer safety, environment, employment, economic development or national security
A wide range of exceptions are aimed at reconciliation between both, allowing the adoption of legislation and measures in conflict with substantive WTO disciplines
General exceptions: Art XX GATT and XIV GATS
Security exceptions: Art XXI GATT and XIV bis GATS
Economic emergency exceptions: XIX GATT and Agreement on Safeguards
Regional integration exceptions: XXIV GATT and V GATS
Balance of payment exceptions: XII and XVII:B GATT and XII GATS
Economic development exceptions



General Exceptions
Societal values and interests

General exceptions: Art XX GATT and XIV GATS
Interpretation: exception without a narrow interpretation: AB insisted in a necessary equilibrium (US Gasoline AB 18)
Analysis: Two Tier: (i) Measure adopted; (ii) Application of the measure (chapeau test)

Measure adopted
Temporary justification of the measures under para. (a) to (j) Art XX
With necessity test
Para (b) public health and environment:
objective + necessary measure. A measure is necessary if no ‘less restrictive to trade’ measure available (BoP)
Para (d) secure compliance with national law (IP, customs): must secure compliance and be necessary
In order to know if a measure is necessary, balance (then compare with alternatives):
Importance of the societal value
Impact of the measure on trade
Extent to which the measure contributes to the protection of the value
Without necessity test:
Para (g) exhaustion of natural resources
Measure must ‘relate to’ + be implemented ‘in conjunction with domestic restrictions’ Not limited to mineral resources.
The end must be real and close (no necessity requirement)

Art XX chapeau requirements
Avoid misuse of the exceptions
Unjustified discrimination occurs when a member fails to conduct multilateral negotiations before implementing any unilateral measure
Arbitrary application appears when the measure is applied in a rigid and inflexible manner
Rational: contribution to the attainment of the pursued good
Important: architecture of the norm

Identical structure under GATS: Art XIV. Differences: Art XIV GATS and XX GATT
Relevance of the necessity test in US-Gambling and BoP. Lack of a
necessity

test
when applying Art XIV in
(d) prevention of deceptive and fraudulent practices and
(e) protection of the privacy of individuals
Invoked only once, unsuccessfully

Societal values and interests
Other exceptions
Art XXI GATT and XIV bis GATS regarding national or international security:
Fissionable materials
Trade in arms
Time of war or international relations
Relation with the Charter for the Maintenance of International Peace and Security
Safeguards: Art XIX GATT and Safeguard Agreement:
Restrictions on imports when domestic industry suffers adjustment due to new economic realities
Typically in the form of Quantitative Restrictions
Compensation to affected members is mandatory
Requisites: (i) increased imports; (ii) serious injury or threat; (iii) causal relation
Regional integration, Art XXIV GATT and V GATS
WTO-inconsistent measures to pursue regional integration
Only if the aim is the adoption of new regional agreements (or expansion) and the measure is necessary to the effectiveness of the agreement
Economic development exceptions
Increasing trade opportunities to DCM
Measures adopted by developed countries, to favor DCM
Flexibility in commitments, transition periods, technical assistance, etc.
Generalised System of Preferences (Enabling Clause): deviation from MFN (art I:1 GATT)





Other Exceptions
Art XVI.2 GATS In sectors with market-access commitments, limitations on
number of service suppliers
numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;
Total value of service transactions or assets
Numerical quotas or requirement of an economic needs test;
Total number of service operations;
Total number of natural persons that may be employed;
Measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and
Participation of foreign capital
Other barriers
Lack of transparency (Art. III GATS)
Unfair and Arbitrary application of Trade Measures (Art. VI.2 GATS)
Government Procurement: Art. XIII.2 GATS
Agreement on Government Procurement also applicable


Market Access Barriers in Services

Rules on Unfair Trade
Other charges and duties
Trade Exceptions
TRIPS Agreement
TRIPS Agreement
Origin - Objectives
IP. Negative rights over artistic, literary, scientific or industrial fields
Members may adopt measures 'necessary to protect public health and nutrition'
Lacks a definition on IP. It refers to a number of IP rights (Sect. 1 to 7, Part. II).
Non exhaustive list that has to be read in connection with the Conventions TRIPs incorporates


PART I General Provisions and Basic Principles

PART II Standards Concerning the Availability, Scope and Use of Intellectual Property Rights
1. Copyright and Related Rights
2. Trademarks
3. Geographical Indications
4. Industrial Designs
5. Patents
6. Layout-Designs (Topographies) of Integrated Circuits
7. Protection of Undisclosed Information
8. Control of Anti-Competitive Practices in Contractual Licences

PART III Enforcement of Intellectual Property Rights
1. General Obligations
2. Civil and Administrative Procedures and Remedies
3. Provisional Measures
4. Special Requirements Related to Border Measures
5. Criminal Procedures

PART IV Acquisition and Maintenance of Intellectual Property Rights and Related Inter-Partes Procedures

PART V Dispute Prevention and Settlement

PART VI Transitional Arrangements

PART VII Institutional Arrangements; Final Provisions
IP refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. Monopoly. Exclusive right (i) to perform an action or acquire a benefit, with exclusion of third parties; and (ii) to prevent all third parties not having the owner’s consent from using it in the course of trade its rights.

Industrial property.
Inventions (patents), trademarks, industrial designs, GI
Copyright
. Literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. It includes performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.

The innovations and creative expressions of indigenous and local communities are also IP, yet because they are “traditional” they may not be fully protected by existing IP systems.
Temporal scope of application: Non retroactive: Does not apply to acts before its 'date of application
Differentiate: Acts from rights
General Provisions and Basic Principles
- Members are to give effect to TRIPS according to their law. It incorporates the WIPO Conventions. It expressly provides for additional protection in certain areas and links them all to DSU.
- Art. 3. NT. Different (also de facto) treatment. Respect to exceptions contained under other Conventions
- Art. 4. MFN. Applies to 'nationals', instead of 'like' products. Exception, Conventions predating WTO
Exhaustion of IP. Derivative uses
Copyright
Production in the Literary, scientific and artistic domains: freedom to determine the level of originality
Berne Convention 1971+ computer programs and databases
Protection is limited to a particular term.
Limitations (cultural / economic) cannot affect 'normal exploitation' of the work, must refer to special cases and do not unreasonably prejudice the legitimate interests of the holder (Art. 13 Trips, US-Section 110 Copyright Act)
Not limited to rights stemming from Trips

Trademarks
Signs that aim to distinguish goods or services by communicating information about their source (art. 15.1). Not all signs that are capable of registration must be registered by members (US Section 211 Appropriations Act): Open list (no need to be among those explicitly prohibited by the Paris Convention)
Paris Convention 1967
Protection for commercial 'similar' uses
Exceptions (Art. 17 Trips). Members are allowed to create exceptions:
(i) limited. Canada Pharma-patents, not undercuting body rules;
(ii) considering owners' rights (Art. 30 Trips, EC-Trademarks )
Use of trademarks is renewable and unlimited (Art. 18 Trips).
Members are free licensing conditions: excludes compulsory licensing

Geographical indications
WIPO: GI is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that origin.
TRIPS: GI are indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.”

GIs are protected in accordance with international treaties and national laws under a wide range of concepts, including laws specifically for the protection of GIs, trademark laws in the form of collective marks or certification marks, laws against unfair competition, consumer protection laws, or specific laws or decrees that recognize individual GIs.

A place name is sometimes used to identify a product. This GI does not only say where the product was made, more importantly, it identifies the product’s special characteristics, which are the result of the product’s origins. Well-known examples include “Champagne”, “Scotch”, “Tequila”, and “Roquefort” cheese.

Members shall provide means to prevent:
False” geographical indication, and Unfair competition

Standard level of protection (art. 22.2 Trips)
Protection for wines & spirits (art. 23 Trips) higher levels of protection, i.e. even where there is no danger of the public being misled.
Exceptions are allowed.
Name already protected as a trademark
Generic term.
Cheddar: now refers to a particular type of cheese not necessarily made in Cheddar, in the UK. But any country wanting to make an exception for these reasons must be willing to negotiate with the country which wants to protect the geographical indication in question.

Berne Convention for the Protection of Literary and Artistic Works of September 9, 1886, completed at PARIS on May 4, 1896, revised at BERLIN on November 13, 1908, completed at BERNE on March 20, 1914, revised at ROME on June 2, 1928, at BRUSSELS on June 26, 1948, at STOCKHOLM on July 14, 1967, and at PARIS on July 24, 1971, and amended on September 28, 1979
Paris Convention for the Protection of Industrial Property of March 20, 1883, as revised at Brussels on December 14, 1900, at Washington on June 2, 1911, at The Hague on November 6, 1925, at London on June 2, 1934, at Lisbon on October 31, 1958, and at Stockholm on July 14, 1967, and as amended on September 28, 1979
Universal Copyright Convention of 6 September 1952, adopted on September 6, 1952 at Geneva
International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, done at Rome on October 26, 1961
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of their Phonograms, of October 29, 1971
WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), negotiated in the 1986-94 Uruguay Round
WIPO Copyright Treaty, adopted in Geneva on December 20, 1996. WIPO Performances and Phonograms Treaty WPPT), adopted in Geneva on December 20, 1996.

IP Treaties
Patents
Definition (WIPO): A patent is a document, issued, upon application, by a government office describing an invention and allowing legal exploitation upon authorization of the owner of the patent. “Invention” means a solution to a specific problem in the field of technology. An invention may relate to a product or a process.
Term of Protection: Minimum of twenty (20) years from filing date.

Patentable Subject matter:
(i) new, (ii) involve an inventive step; and are (iii) capable of industrial application.

Rights Conferred:
 Exclusive rights:
 Product: prevent others not having the owner’s consent from the acts of: making, using, offering for sale, selling, or importing for these purposes that product;
 Process: prevent others not having the owner’s consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process.
 Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts.

Conditions on Patent Applicants:
disclosure of the invention in a manner sufficiently clear and complete

Exclusions: Members may exclude from patentability inventions: commercial exploitation if necessary to protect order public, morality, human, animal or plant life or health or to avoid serious prejudice to the environment.
Diagnostic, therapeutic and surgical methods for the treatment of humans or animals
Plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, protectable by patents or by a special system (such as the breeder’s rights provided in the conventions of UPOV — the International Union for the Protection of New Varieties of Plants)
Compulsory licenses Allowing production under license. Under certain conditions aimed at safeguarding the legitimate interests of the patent-holder.

Other Rules on Non-Tariff Barriers
Combating
NTB
and promoting harmonization
TBT Agreement: Regulation of technical measures implemented by States with different protection outcomes
Avoid new non tariff barriers
Relation with GATT: necessity to analyze, but priority to TBT specifically
with SPS matter issue. Generally, SPS prevails, unless it can be divided.







Relevance of the TBT Committee: Consultation, annual review and technical assistance


Technical Barriers to Trade
Scope
Measures

technical regulations (as defined under annex1.1 General Interpretative Note to Annex 1A: special rule
What are the features of technical regulations?
standards (even voluntary)
Article 4 and annex 3 of TBT Ag.
Conformity assessment procedures: irrespective of its impact in the product
"Entities": debate NGO's, commercial enterprises, semi-private entities

Substantive Law
Foster GATT, thus it contains the same standards (MFN, NT)
NO exceptions as art. XX GATT:
Why is this important?

0. Is it a regulation under TBT?
1. Likeness:
Clove Cigarettes discrepancy. Explain.
Again, focus in competitive relation (though, need to consider the objectives and purposes of the Tech Reg, rather than the competitive relation among the products)
2. No less favorable treatment: Similar to that requirement under III.4 GATT

Avoid unnecessary obstacles: Comparison with legitimate objectives
test
: (i) trade restrictive; (ii) legitimate objective, (iii) no more than necessary;
(iv) Must use international standards when they exist
When is it relevant and how is it applied? [Sardines case]

Other Provisions: mutual recognition, performance and transparency (interval)
Features of technical regulations [Sardines / Asbestos]

identifiable group of products
positive / negative lay own of characteristics
mandatory compliance

Difference standard v. technical regulation [US- Tuna]
is it a law or a regulation?
is it prescribing or prohibiting a conduct?
is it the only manner to solve the matter?
what it the issue that the measure intends to tackle?
Combating
NTB
and promoting harmonization
SPS Agreement: deals with norms to protect human, animal or plant life and health
Relation with GATT: necessity to analyze, but priority to SPS
Generally, SPS prevails over TBT







Relevance of the TBT Committee: Consultation, annual review and technical assistance


Sanitary and Phitosanitary measures
Scope
Measures

technical regulations (as defined under annex1.1 General Interpretative Note to Annex 1A: special rule
What are the features of technical regulations?
standards (even voluntary)
Article 4 and annex 3 of TBT Ag.
Conformity assessment procedures: irrespective of its impact in the product
"Entities": debate NGO's, commercial enterprises, semi-private entities

Substantive Law
Foster GATT, thus it contains the same standards (MFN, NT)
NO exceptions as art. XX GATT:
Why is this important?

0. Is it a regulation under TBT?
1. Likeness:
Clove Cigarettes discrepancy. Explain.
Again, focus in competitive relation (though, need to consider the objectives and purposes of the Tech Reg, rather than the competitive relation among the products)
2. No less favorable treatment: Similar to that requirement under III.4 GATT

Avoid unnecessary obstacles: Comparison with legitimate objectives
test
: (i) trade restrictive; (ii) legitimate objective, (iii) no more than necessary;
(iv) Must use international standards when they exist
When is it relevant and how is it applied? [Sardines case]

Other Provisions: mutual recognition, performance and transparency (interval)
Features of technical regulations [Sardines / Asbestos]

identifiable group of products
positive / negative lay own of characteristics
mandatory compliance

Difference standard v. technical regulation [US- Tuna]
is it a law or a regulation?
is it prescribing or prohibiting a conduct?
is it the only manner to solve the matter?
what it the issue that the measure intends to tackle?
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