Law 724 WINTER 2016 Professor DANIELE BERTOLINI Lecture 3. WTO II (Based on M. J. Nicholson, A. Brierley, Legal Aspects of International Business , 2015)
Today Class: Overview 1.GATT PRINCIPLES (Con’t) u EC- Absestos u Japan-Taxes on Alcoholic Beverages u Japan–Semi-Conductors 2.GATT Exceptions u Trade Remedies (ADDs, CVDs, Safeguards) u Art. XX (General Exceptions) u Preferential Trade Agreements (Art. XXIV)
Let’s Review: GATT fundamentals principles A. Binding Concessions Rule u The Chicken Case B. MFN u EC–Banana C. National Treatment Principle u Internal taxation: Japan-Taxes on Alcoholic Beverages, 1996 u Internal Regulation: EC- Absestos D. Ban on Non-Tariff Barriers u Japan–Semi-Conductors 3
NATIONAL TREATMENT RULE u There should be no distinction made between the similar (“like” ) domestic or imported goods. u Once a good or service is legally present in a country (it has been cleared through customs), it must receive the same treatment as a like domestic good or service u NOTE: The National Treatment Rule refers to both tax and regulatory discriminatory treatment. 4
National Treatment: Leading Cases ① Internal Taxation (GATT Article III:2) Leading Case: Japan-Taxes on Alcoholic Beverages, 1996 ② Internal Regulation (GATT Article III:4) Leading Case: EC–Absetsos 5
GATT Art III (1): General Principle “ 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 .” 6
GATT National Treatment Rule: Overview Art III Art III (1): General Principle u “should not be applied to imported or domestic products so as to afford protection to domestic production ” Art III (2) Internal Taxation: u (First Sentence): “in excess of” … “like domestic products” u (Second Sentence): “ in a manner contrary to the principles set forth in paragraph 1” Art III (4) Internal Regulation: u “no less favourable than like products” 7
National Treatment: Taxation Art III(2) u (First Sentence) <<The products of the territory of any contracting party imported into the territory of any other contracting party shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products. […] >> u (Second Sentence) Moreover, no contracting party shall otherwise apply internal taxes or other internal charges to imported or domestic products in a manner contrary to the principles set forth in paragraph 1 .
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