” “ International Trade Law WTO (Lecture 12) Prof.ssa M.E. de Leeuw, Ph.D., Dr., Università di Ferrara

” “ International Trade Law   Cell:  Question hour : Tuesday (after class, same room)  Course Website : Internal Trade Law (in lingua inglese) Internal Trade Law (in lingua inglese) sprudenza/studiare/International%20Tr ade%20Law%20%28in%20lingua%20i nglese%29%20  Place : Via Ercole I d’Este 37, class 6  Lezioni : Tuesday and Thursday  Time :  Requirement : commercial law  Crediti : 6

” “ The World Trading system (WTO) The WTO trade rules: The agreement creating the WTO (umbrella agreement);  Goods: GATT General agreement for tariffs and trade (annex 1A), [GATT 1947 plus decisions/waivers]  Services: GATS- General agreement for trade in services (annex 1B);  IPR: TRIPS- Trade related aspects of IPR (annex 1C)  Dispute settlement (annex 2);  Trade Policy reviews (annex 3).

” “ Special agreements GATT:Services (GATS): · Agriculture · Health regulations for farm products (SPS) · Textiles and clothing · Product standards (TBT) · Investment measures · Anti-dumping measures · Customs valuation methods · Preshipment inspection · Rules of origin · Import licensing · Subsidies and counter-measures · Safeguards · Movement of natural persons · Air transport · Financial services · Shipping · Telecommunications

” “ Principles of the WTO system* The trading system should be...  without discrimination - “most-favoured-nation” and “national treatment”;  freer- lift barriers  predictable —no arbitrarily raised barriers; tariff rates and market-opening commitments are “bound”;  more competitive — discouraging “unfair” practices;  more beneficial for less developed countries - giving them more time to adjust, greater flexibility, and special privileges. *From WTO home page.

” “ 1. Market Access: Tariffs The basic rules underlying the GATT:  Principle of bound tariffs (“bindings”), art. II- rationale trade offs.  Principle of reciprocity/tariffs concessions: (re)negotiations or rounds  MS cannot collect on the imported products more than the level tariffs than the “bound rate”, but less they can, i.e. “applied rate”.  Country schedules and list of applied tariffs

” “ Art II: Binding Tariffs Rates  The products described in Part I of the Schedule relating to any contracting party, which are the products of territories of other contracting parties, shall, on their importation into the territory to which the Schedule relates, and subject to the terms, conditions or qualifications set forth in that Schedule, be exempt from ordinary customs duties in excess of those set forth and provided therein. Such products shall also be exempt from all other duties or charges of any kind imposed on or in connection with the importation in excess of those imposed on the date of this Agreement or those directly and mandatorily required to be imposed thereafter by legislation in force in the importing territory on that date.other duties or charges

” “ 2. Market Access: MFN principle  Art I GATT: “any advantage, favour, privilege or immunity granted by any contracting party 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 contracting parties”  MFN multilateralization the approach of bilateral agreements;  result free-riding.

” “ 3. Market Access: Quotas  Prohibition of non-tariffs restrictions, e.g. quantative restrictions: art. XI “No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party.”  Exceptions:  art. XI.2 (e.g. fish, and temporary restrictions)  Art. XIII for legally imposed quantative restrictions counts MFN.

” “ 4. M arket Access: National Treatment  National treament: Art. III “The contracting parties recognize that internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production” (par. 1)  Goal- to prevent protectionism  Like products: competitiveness

” “ Market access: Developing countries  GATT Enabling Clause 1979: deviation to art. I GATT (MFN)  Scope: limited to trade to goods  It allows GATT/WTO members to offer lower than MFN tariffs to developing countries (e.g. the EU GSP system); no reciprocity  Non-discrimination clause; no discrimination among similar developing countries.

” “ Special and general exceptions  Safeguard measures- art. XIX and specific agreement  Article XX- general exceptions; public morals, human, animal or plant life and health etc.., subject to conditions (good faith):  “Necessity test”: value at issue, efficacy of the measures, trade restrictiveness;  No disguished restrictions and no arbitrary discriminations  Trade and evironment- US shrimp case  Other exceptions: art. XXI (security interest) and waivers

” “ Art. XX: general exception  “Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:  A) necessary to protect public morals;  B) necessary to protect human, animal or plant life or health  G) relating to the conservation of exhaustible natural resources…..

” “ Exception: RTA  Art. XXIV WTO: for countries that sign regional trade agreements in the form of custom union or FTA. Two conditions:  no increase in trade barriers against third parties  lead to elimination of tariffs and non-tariffs barriers on trade between MS countries

” “ Unfair competition  Art. XIX GATT: raise trade barriers in answer to unfair trade: anti-dumping and anti-subsidy.

” “ GATS  Art. XIX: The aim is to achieve liberalisation;  Member schedules;  GATS: part III specific commitments:  National treatment (art. XVII):  In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set out therein, each Member shall accord to services and service suppliers of any other Member, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers.  Market access (art. XVI):  (par. 1) With respect to market access through the modes of supply identified in Article I, each Member shall accord services and service suppliers of any other Member treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule.  (Par. 2): categories of restrictions which may not be adopted, unless specified in schedules  MFN principle (general and unconditional obligation): art. II

” “ GATS  Provisions on tranparency (art. III); make available laws/regulations  Provisions on national regulation: “In sectors where specific commitments are undertaken, each Member shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner” (art. VI(par. 1)).  Provisions on exceptions, RTAs, security;

” “ TRIPS  TRIPS contains min. standards building on existing international agreements;  Aims of TRIPS:  “Desiring to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade” (preamble)  Article 7 and 8: objective and principles.  National treatment (art. III- exceptions exist) and MFN (Art. IV- limited exceptions exists)

” “ Institutional aspects  Ministerial Conference: highest authority (ministers meet 1 per 2 years);  Day to day work:  General Council  The Dispute Settlement Body  The Trade Policy Review Body  Goods Council, Services Council and TRIPS Council; they have subsidiary bodies dealing with specific subjects.  Committees on e.g. trade and development, the environment, regional trading arrangements, and administrative issues (total 6)  Informal meetings