Raumplanungs- und Baurecht

•Part I: Scope and definition

§The four modes of supply and the covered persons (companies and natural persons)

•Part II: General obligations and disciplines

§Especially MFN – Art. II  (similar to the GATT), transparency, domestic regulation, recognition, general exceptions

•Part III: Specific commitments

§Market access (Art. XVI), National treatment (Art. XVII), Additional commitments (Art. XVIII)

§NB: provided only when specifically subscribed for in the WTO Member’s own “Schedule of commitments!!

§Part IV: Progressive liberalization

§Negotiation and modification of schedules of commitments

§Part V: Institutional provisions

4 Modes of services: 

Mode 1: Cross-border trade (the service supplier and the consumer do not leave their respective countries: e.g. services provided through telephone or internet)

Mode 2: Consumption abroad (the service consumer moves to the service supplier’s country: e.g. a student travelling to another Member to participate in a language course)

Mode 3: Commercial presence (supply of services following an investment = some type of an establishment in the jurisdiction of another Member : usually an agency, branch, subsidiary, joint venture or professional establishment)

Mode 4: Presence of a natural person = supply of a service by (a) natural person(s) who move from the territory of one Member to the territory of another Member: e.g. a foreign lawyer coming to carry out a due diligence audit for his client based in another country

•Once a WTO member deems a subsidy prohibited or actionable, it can act against the subsidy in two ways

1.One is to challenge the matter under the WTO’s dispute settlement mechanism. If the complaint is upheld, the defendant is required to bring the offending policy(ies) into conformity with WTO provisions

2.A second route is for the adversely affected party to impose countervailing duties on the imports benefiting from the subsidies. These may be applied on either a provisional or a definitive basis (or both successively) and must not exceed the level necessary to counteract the margin of subsidisation

•Obviously, the countervailing duties may be challenged by the WTO member against whose exporters they have been placed

•Alternatively, the investigating government may agree to accept an undertaking either from the government of the exporting country that the subsidy will be limited or eliminated, or from the exporter(s) that they will raise prices by enough to eliminate the effect of the subsidy (a price undertaking)

•In order to come under the scope of multilateral rules on subsidies, a policy instrument must meet three criteria:

i.it must be financial in nature

ii.it must confer a benefit and

iii.it must be specific to an enterprise, and industry, or a group of enterprises or industries (for example in a specific region)

Once these three criteria have been met, the rules distinguish between two types of subsidy:

•Ones that are per se prohibited;vs Ones that are “actionable”

•Must be financial in nature and provided by a public body

•What level of government? With what powers?

•-> Any level and those bodies exercising or vested with governmental authority

•Must confer a benefit

•A wide list included in Art. 1.1 of the SCM Agreement: direct transfers of funds, tax exemptions, payments through a funding mechanism etc.

•The AB has ruled (Canada – Aircraft) that the existence of a 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)

•Must be specific

•The SCM Agreement applies only to ‘specific’ subsidies and not those widely available in the market. That happens if the public body specifically makes the benefit available only to certain operators

•If the benefit is widely available to everyone who fulfils the criteria and the granting is automatic, no ’speficity’ per se. However, one must look at de facto application

•If in reality only certain operators qualify, the subsidy may be considered ’specific’

Dumping arises when an exporter sells goods in a foreign market below the price for “like products” charged in the normal course of trade in the exporter’s domestic market

•The anti-dumping agreement spells out very detailed criteria and requirements according to which governments must conduct investigations. What are these criteria?

i.There has to be a founding of dumping (comparison of prices); and

ii.The dumping must have caused injury to the domestic industry

iii.There must be a causal link between the two

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•If dumping is found, what can the importing WTO member do?

•a WTO member may impose anti-dumping duties that offset the value of the dumping margin

•Instead of imposing duties, the importing country’s authorities may at their discretion accept a price undertaking from the company concerned

•An undertaking to increase the price of the product(s) concerned by enough (but no more) to eliminate the margin of dumping

If dumping margins are very small (no more than 2%), no anti-dumping measures can be imposed.

•Some measures that would otherwise be considered under the MFN and the national treatment principle, may sometimes be considered technical regulations. If so, they are instead analysed under the TBT Agreement instead of articles I (MFN) or III (NT principle) of the GATT Agreement) -> TBT is a lex specialis

•Technical regulations and standards set out specific characteristics of a product — such as its size, shape, design, functions and performance, or the way it is labelled or packaged before it is put on sale

• The TBT Agreement aims to ensure that technical regulations, standards, and conformity assessment procedures are non-discriminatory and do not create unnecessary obstacles to trade

•At the same time, the TBT Agreement recognises WTO members' right to implement measures to achieve legitimate policy objectives, such as the protection of human health and safety, or protection of the environment. The TBT Agreement strongly encourages members to base their measures on international standards as a means to facilitate trade. Technical regulations that are in accordance with relevant international standards are rebuttably presumed “not to create an unnecessary obstacle to international trade”. Through its transparency provisions, the agreement also aims to create a predictable trading environment

•The analysis of ‘likeness’ is similar -> the WTO Appellate Body has recognised that regulatory concerns may have a role to play when considering ‘likeness’ (eg. EC-Asbestos case)

•TBT Agreement does not include a list of general exceptions like the GATT does

•The protection of legitimate public policy objectives is considered as part of the analysis of Art. 2.1 of the TBT Agreement:

1. Members have the right to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement.

2. Members shall ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5.

3. Members shall ensure that their sanitary and phytosanitary measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own territory and that of other Members. Sanitary and phytosanitary measures shall not be applied in a manner which would constitute a disguised restriction on international trade.

CASE: US EU beef hormone test--> no scientific just in EU--> harmonization in health reqs

•The rules we studied so far (MFN and NT principle) do not expect WTO members to change their national laws, as long as those laws are not discriminatory

•The WTO, however, has two agreements that expect WTO members to go further, beyond discrimination -> how? -> By aiming to set out some common trade-friendly standards on how to approach legitimate policy goals relating to technical regulations and food safety standards

•What are these two agreements?

•The Technical Barriers to Trade Agreement (TBT Agreement) of 1995: aims to ensure that technical regulations, standards, and conformity assessment procedures are non-discriminatory and do not create unnecessary obstacles to trade. The TBT Agreement strongly encourages members to base their measures on international standards as a means to facilitate trade.

•The WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) of 1995: Concerns the application of food safety and animal and plant health regulations. It allows countries to set their own standards. But it also says regulations must be based on science. They should be applied only to the extent necessary to protect human, animal or plant life or health. And they should not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail

• An exhaustive list of situations where imports can be restricted (through quotas or raised tariffs) based on justified reasons

•Included in both GATT (Art. XX) and GATS agreements (Art. XIV)

•Important elements:

• Identification of the range of possibly justified policies in accordance with the list of justifications in Articles XX GATT and XIV GATS

• Determination whether the elements of the relevant justifications are met

-> Necessity test

• Application of the discrimination/”disguised restriction test” of the chapeau (first paragraphs) "measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade"

ALSO National Security exception Art. XXI!

NT obligation = no discrimination between imported & domestic products

WTO members can set their own domestic regulations but must not discriminate

Art. III para 2 AND para 4!

Jaanese Sochu case: III.2: 

The first sentence of Art. III GATT requires that the two products are like. Both the panel and the AB considered that only vodka met that standard as compared to sochu Vodka and schochu shared similar characteristics and also had identical tariff bindings in Korea’s tariff schedule, BUT HERE comes DCS (directly competitive or substitutable) rule: -> If the products are not like but still in direct competition with each other or substitutable products, and the intention is to afford protection to domestic protection -> a violation of Art. III:2, second sentence

•The competitive relationship between the products is compared -> are we comparing products that are similar enough?

• Used with both the MFN and the national treatment principle

•The term of “like products” is not defined in the WTO agreements but has been clarified in case law

The GATT/WTO panels and the WTO Appellate Body have paid attention to the following factors:

• the physical characteristics of the products

• consumer tastes and habits regarding the products

• the end use of the products

• the tariff classification of the products

Spanish Coffee case

The Panel found that a contracting party had the right to introduce in its customs tariff new positions or sub‑positions as appropriate. The However, whatever the classification adopted, Article I:1 required that the same tariff treatment be applied to "like products“ whether the various types of unroasted coffee listed in the Royal Decree 1764/79 should be regarded as "like products" within the meaning of Article I:1

The panel agreed with Brazil’s argument and concluded that coffee beans listed in the Spanish Customs Tariffs should be considered as "like products" within the meaning of Article I:1

The Panel further noted that Brazil’s main coffee exports to Spain were presently charged with higher duties. Since these were considered to be "like products” with other types of coffees, the Panel concluded that the tariff regime as presently applied by Spain was discriminatory vis‑à‑vis unroasted coffee originating in Brazil

•Exceptions

•Possibility to accord differential and more preferential treatment to developing countries (“Enabling clause”)

•Customs Unions and Free Trade Areas (Article XXIV) -> fully liberalizing preferential trade agreements (PTAs) that enable free trade between the parties only (e.g. NAFTA, CETA). The number of PTAs is growing fast but about 75 % of world trade still occurs on MFN terms

•Exceptions based on certain key societal interests, such as protection of public health, public morals and conservation of exhaustible natural resources (Art. XX GATT General Exceptions)

•Hidden discrimination

•Tax (through tariffs or internal taxes) the type of products produced by some countries more heavily than those produced by others

•E.g., a higher customs duty (CD) on beer than on cider if you want to favour France over Germany

•E.g., a higher CD on “Robusta” than on “Arabica” coffee if you want to benefit Colombia over Brazil

•Breach of MFN treatment obligation?

•In order to establish a breach, you need to show that the two products treated differently are “like products” (and should therefore be treated alike)

Article I of the GATT 1994, entitled ‘General Most-Favoured-Nation Treatment’, states in paragraph 1:

“With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation[] and with respect to all matters referred to in paragraphs 2 and 4 of Article III, 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].”

•Any advantage, favour, privilege or immunity

•Any treatment by a WTO member that puts other WTO members in a different position between themselves (at the border or after the border

•Article I:1 of the GATT 1994 covers not only ‘in law’, or de jure, discrimination but also ‘in fact’, or de facto, discrimination. In other words, Article I:1 applies not only to ‘origin-based’ measures (which are discriminatory by definition) but also to measures which, on their face, appear ‘origin-neutral’ but are in fact discriminatory

•What is the point of comparison regarding the imported products from different WTO members?

•Like products -> products that share enough product characteristics and are treated in an interchangeable manner by consumers

Ø MFN: no discrimination between producers from different WTO Members

Ø NT: no discrimination between domestic products and products from other WTO Members

Ø

v MFN is always at work, whereas NT applies after the products have crossed the border

v Both apply to like products only

ons, who are ALIVE! Definition might be a little outdated, because now everything is potentially identifiable.