This is a last minute 38 pages summary!!! It includes all the important cases for each topic and they are highlighted in Green already, easy to read and is handy for the exam. Personally I scored an 8 using my summary! A must-have if you have not done any revision during the semester!
International Trade and Investment Law
Non-discrimination
- One of the GATT principles of WTO law
- Further divided into two principles – MFN and NT obligations, MFN is more favorable
- Three dimensions of comparing the applicability of the MFN and the NT:
- 1. Types of measures addressed: MFN applies to both border and internal measures, NT
applies only to internal measures
- 2. Degree of similarity between the products required: The products required for the
clause to apply: MFN has more stringent requirements, it requires that the measures are
fully similar
- 3. Origin of the products to be compares: MFN refers to treatment of different foreign
products, NT refers to the treatment between the domestic and foreign like products
MFN
- Art. 1 GATT: ‘Any trade advantage granted to products of any country must be extended
immediately and unconditionally to liked products of goods originating in a WTO
member’.
- MFN regulates the treatment of products among WTO members. Treatment of foreign
product, same good coming from the WTO members must be treated the same way
- Aims to
→ Spread liberalization quickly
→ Spread liberalization completely
→ Make joining the WTO more attractive
Scope of MFN
- Applies to both de jure and de facto discrimination (Canada- Autos- Discrimination does
not need to be described in the actual law, neutral law can still discriminate)
- Also apply to potential discrimination if there is a small chance they think you
discriminate a product then you are violating the MFN principle
- Don’t care about your aims,
- There is no aims-and-effects test: the aims of the regulating country and the effects on
trade become irrelevant
- No re-balancing is possible
- Applies to tariffs and NTBs
- Actual trade effects are not required, potential trade effects can suffice to establish a
violation of the MFN principle (art. 28 GATT)
EC-Bananas III: States must treat products equally, irrespective of their origin. (p. 136 book)
“The Panel found that conditioning the imposition on certain bananas of the in-quota tariff rate
upon their origin was an advantage coming under the purview of art. I GATT”
EC-Seals: Protecting expectations of equal competitive opportunities is important for like
imported products from all members.
,3 steps to establish if there is a MFN violation
1. If the measure/ omission an advantage of the types covered in art. I?
2. Is the advantage offered immediately and unconditionally?
3. Is the advantage offered to all like products? If yes then no violation; if it’s only for some
products then you are violating it.
Any advantages?
MFN applies to any advantage, broad interpretation, advantage can be both an act or an
omission
- some policies that could violate the MFN principle are the requirement of marking the
origin of a product, a license procedure, a tariff quota or a discriminatory administration
proceeding (Border measures)
- MFN also applies to internal measures
To any country
- The MFN applies to any advantage granted to any country, regardless of they are WTO
members or not
- Such advantage must be extended to all other WTO members → Guarantee the
best-available treatment
- Even if you gave it to a Non-WTO member, you are still supposed to give the same
advantage to a WTO member; it doesn't matter if the advantage is granted to a member
state or not.
Immediately and unconditionally…
Any advantages must be extended immediately and unconditionally to all other WTO members
‘Immediately’ = the absence of a time gap
‘Unconditionally’= generally mean that any additional conditions apply in a non-discriminatory
manner when it comes to like products originating in two countries
EC - Seals → introduced a small exception, conditions can be allowed as long as they do not
result in a detrimental impact on the competitive opportunities for imported products.
Does not mean that no condition is allowed. Main rule: You are not supposed to make it
conditional. Art 1 permits regulatory distinctions between imported products, as long as such
distinctions do not result in a detrimental impact on the competitive opportunities for imported
products.
Like products under art. 1 GATT
According to the Border Tax Adjustment case law, 4 criteria can be used to establish
likeness (you are supposed to give advantage to ‘like-product according to art. 1)
1. Physical characteristics – first sight, what do you see
2. Consumer tastes and habits – how the consumer use the product, do they use it in the
same way
, 3. End uses– what’s the ultimate end use that these products are gonna be in place for
4. Tariff classification (most important criterion) – when MS enters into the GATT, they
have a tariff schedule, for this product we put this much tariff (tax you pay to export
goods), if you impose the same tariff then it’s more likely that they are like, they are
similar!
All of them have to be met, even if one is not met, EC Seal tells us that the 4th criterion is the
most dominant one, just look at the tariff!
Likeness is interpreted narrowly for the MFN principle, and the 4th criterion is widely accepted
as the most dominant one.
EC Spain-Unroasted Coffee: Whether Colombian coffee and Brazilian coffee were like → AB
ruled that process-based distinctions were irrelevant in defining likeness, the differences in
cultivation or processing of the beans should not be considered when seeking to establish
likeness. Different types of coffee are subject to the same tariff rates, there is no right to make
tariff classification distinctions for the two types of coffee beans that do not appear in the original
schedule.
Process and Production methods (PPMS)
- Difference due to geographical factors, cultivation methods, processing of the beans;
- Irrelevance of process-based distinctions in defining likeness
- Different types of coffee are subject to same tariff rates
- No right to make tariff classification distinctions that do not appear in the original
schedule
Exceptions to the MFN obligation
- Enabling clause
- Regionalism → art 24 GATT
- Art. 20 GATT – General exceptions
- Art. 21 GATT – Security exceptions
MFN is not always helpful for developing countries. Therefore developing countries are allowed
to deviate from GATT disciplines under some exceptions.
S&DT: The Legal discipline
WTO members (developed countries) can have two sets of tariffs
- One MFN, that they apply to all other developed WTO Members
- Another, preferential, that they can apply to all WTO Members that are developing
countries
- Rationale: MFN, not helpful for developing countries, even if you integrate them, you
need to treat them differently. If you want to close the gap between developing and
developed countries you need to set a lower bar to them
Towards preferences
- The institutional response was not reduction of farm protectionism and tariff escalation
- GATT opens the way to non-reciprocal preferences
- But preferences do not equal MFN.
, General System of preferences (GSP) for goods
- Autonomously granted by preference-giving industrialized countries
- Based on Resolution 21 (ii) taken at the UNCTAD II Conference in New Delhi in 1968
- Led to adoption of Part IV GATT and waived from MFN obligation under 1979 Enabling
clause
- Only for selected products
- Receive reduced or zero tariff rate when compared to the MFN rate
- EBA, AGOA etc
- EU GSP+ current beneficiaries: Armenia, Bolivia, Cape Verde, Mongolia, Pakistan, Sri
Lanka and the Philippines
Exception 1: Enabling clause
- Can open the way to non-reciprocal preferences granted to certain countries
- Can grant non reciprocal preference to certain countries, give them advantage without
expecting anything in return, e.g. developed country granting it to developing countries
to help them
- Done under the General System of Preferences
- Allows industrialized countries to grant preferences to developing countries
- Done through Enabling Clause adopted in 1979
- Definition: Differential and more favorable treatment, reciprocity and fuller participation of
developing countries, granting non-reciprocal preferences at the discretion of donors =
developed countries can choose whether to grant a preferential treatment to a
developing country, non reciprocal = not expecting something in return
Enabling Clause entails:
1. Allow developed countries to grant trade preferences to developing countries in a
non-discriminatory basis
2. Allow deeper preferences to be granted to less developed countries with GSP schemes
3. Allow developing countries to enter into Regional Trade Agreements among themselves
EC Tariff Preference: If you complain that you are not granted a preference under GSB even
though you are supposed to be granted, you need to claim that MFN is violated and you are
granted an advantage and you need to identity the enabling clause provision that the scheme at
stakes violates; show that you are also a part of GSB, you are also a developing country, and
that developed countries forgot about you!
In this case, the AB confirmed that the Enabling Clause is a legal exception to the MFN;
regarding the burden of proof, it’s for the complaining party to:
1. Claim an MFN violation
2. Identify the Enabling Clause provisions that the scheme at stake violates
- A GSP scheme can be non-discriminatory even if identical tariff treatment is not
accorded to all beneficiaries
- However, identical treatment should be granted to all similarly-situated beneficiaries
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