The GATT/WTO systemThe GATT/WTO system HistoryHistory- 1947/1948 GATT has « provisional » effect 1947/1948 GATT has « provisional » effect - Series of rounds leading to supplementary Series of rounds leading to supplementary

treaties (codes, side agreements)treaties (codes, side agreements)- Following the Uruguay Round (1986-1994) it Following the Uruguay Round (1986-1994) it

came under the WTO; all agreements in principle came under the WTO; all agreements in principle integrated in a single system (1994) (« package integrated in a single system (1994) (« package deal »), but …deal »), but …

- « Understandings » (interpretation rules) now « Understandings » (interpretation rules) now part of GATT (since 1994) part of GATT (since 1994)

- In 2015: 161 members, 23 observersIn 2015: 161 members, 23 observers

WTO March 2013WTO March 2013

WTO system - general WTO system - general structurestructure Structure Marrakesh Agreement 1994

((http://www.wto.org/english/docs_e/legal_e/legal_e.htm):http://www.wto.org/english/docs_e/legal_e/legal_e.htm):- Agreement establishing the WTOAgreement establishing the WTO- Annex 1 A = Multilateral agreements on trade in goods (MATG)Annex 1 A = Multilateral agreements on trade in goods (MATG)- Annex 1 B = General agreement on trade in services (GATS)Annex 1 B = General agreement on trade in services (GATS)- Annex 1 C = TRIPs (trade related aspects intellectual property)Annex 1 C = TRIPs (trade related aspects intellectual property)- Annex 2 = Annex 2 =   Dispute Settlement Understanding  (DSU)Dispute Settlement Understanding  (DSU)- Annex 3 = TPRM (Trade policy review mechanism)Annex 3 = TPRM (Trade policy review mechanism)- Annex 4 = plurilateral trade agreements (outside the Annex 4 = plurilateral trade agreements (outside the package dealpackage deal, ,

not obligatory ). I.a. Agreement on government procurement, not obligatory ). I.a. Agreement on government procurement, Agreement on Trade in Civil Aircraft, etc.Agreement on Trade in Civil Aircraft, etc.

Uruguay Round Ministerial Decisions and Declarations , ….Uruguay Round Ministerial Decisions and Declarations , …. Accession Protocols may contain additional obligations (WTO-Plus), Accession Protocols may contain additional obligations (WTO-Plus),

eg Chinaeg China ‘‘Doha-Round’ led to a TFA (Trade Facilitation Agreement) amending Doha-Round’ led to a TFA (Trade Facilitation Agreement) amending

the MATG (‘Bali package’) open for ratification since Nov 2014 (not in the MATG (‘Bali package’) open for ratification since Nov 2014 (not in force yet)force yet)

Limited success of Doha Round leads to further attempts for Limited success of Doha Round leads to further attempts for particular Free Trade Agreements (CETA, TTIP, etc.)particular Free Trade Agreements (CETA, TTIP, etc.)

WTO Ann. 1 A: MATG WTO Ann. 1 A: MATG (GATT+)(GATT+) Annex 1 A = multilateral agreements on trade in goods, includes:Annex 1 A = multilateral agreements on trade in goods, includes:

- GATT 1994, i.e. GATT 1947 + incorporated « understandings » GATT 1994, i.e. GATT 1947 + incorporated « understandings » (interpretation rules)(interpretation rules)

- Specific agreements on : customs valuation, rules of origin, import Specific agreements on : customs valuation, rules of origin, import licensing, SPS, TBT, Safeguards, ADA, SCM ... (see further)licensing, SPS, TBT, Safeguards, ADA, SCM ... (see further)

- Agreements concerning specific sectors: Agriculture; Textiles & Agreements concerning specific sectors: Agriculture; Textiles & clothing (terminated 1.1.2005)clothing (terminated 1.1.2005)

- Not yet in force: Trade facilitation agreement 2014Not yet in force: Trade facilitation agreement 2014 Institutional: Council for Trade in GoodsInstitutional: Council for Trade in Goods In general no direct effect In general no direct effect - also not in the EU: C-149/96, also not in the EU: C-149/96, Portugal v. CouncilPortugal v. Council; C-377/02 Van ; C-377/02 Van

ParysParys- ECJ will review conformity with WTO law of EU decisions only in ECJ will review conformity with WTO law of EU decisions only in

case a) a measure intends to implement WTO obligations (ECJ in C-case a) a measure intends to implement WTO obligations (ECJ in C-70/87 70/87 FediolFediol) or b) refers explicitly to specific provisions of WTO ) or b) refers explicitly to specific provisions of WTO law (ECJ in C-69/89 law (ECJ in C-69/89 NakajimaNakajima))

Direct effect has been accepted for some aspects of TRIPSDirect effect has been accepted for some aspects of TRIPS

GATT basic principlesGATT basic principles Basic content and principles:Basic content and principles:I.I. Non-discrimination rules:Non-discrimination rules:- All countries are « most favoured nation » (art. I GATT)All countries are « most favoured nation » (art. I GATT)- Principle of « national treatment » after import (non-Principle of « national treatment » after import (non-

discrimination)(art. III GATT)discrimination)(art. III GATT)II. Market access rulesII. Market access rules- Trade restrictions must be tariff restrictions only Trade restrictions must be tariff restrictions only - Tariff restrictions (customs duties) to be lowered graduallyTariff restrictions (customs duties) to be lowered gradually- Quantitative restrictions in principle prohibited (art. XI)Quantitative restrictions in principle prohibited (art. XI)- Barriers with equivalent effect (NTB) in principle prohibited (art. Barriers with equivalent effect (NTB) in principle prohibited (art.

XI)XI)III. Taking into account other values and interestsIII. Taking into account other values and interests- Exceptions and rules concerning these exceptions + promotion of Exceptions and rules concerning these exceptions + promotion of

harmonisation of national regulationharmonisation of national regulation- Waivers, i.a. a very wide waiver for developing countriesWaivers, i.a. a very wide waiver for developing countriesIV. Rules on unfair trade practices (dumping, subsidies)IV. Rules on unfair trade practices (dumping, subsidies)

MFN (most favoured nation)MFN (most favoured nation) Art. 1 GATT:Art. 1 GATT: With respect to customs duties and charges of any kind With respect to customs duties and charges of any kind

imposed on or in connection with importation or exportation imposed on or in connection with importation or exportation or imposed on the international transfer of payments for or imposed on the international transfer of payments for imports or exports, and with respect to the method of imports or exports, and with respect to the method of levying such duties and charges, and with respect to all levying such duties and charges, and with respect to all rules and formalities in connection with importation and rules and formalities in connection with importation and exportation, and with respect to all matters referred to in exportation, and with respect to all matters referred to in paragraphs 2 and 4 of Article III,paragraphs 2 and 4 of Article III,any advantage, favour, privilege or immunity any advantage, favour, privilege or immunity granted by any contracting party to any product granted by any contracting party to any product originating in or destined for any other country shall originating in or destined for any other country shall be accorded immediately and unconditionally to the be accorded immediately and unconditionally to the like product originating in or destined for the like product originating in or destined for the territories of all other contracting parties.territories of all other contracting parties.

MFN (most favoured nation)MFN (most favoured nation) Art. 1: All countries are treated as « most favoured nation » in relation to:Art. 1: All countries are treated as « most favoured nation » in relation to:- Customs duties and charges in connection with import/export ...Customs duties and charges in connection with import/export ...- & other trade policy measures& other trade policy measures- for « like products »for « like products »- unconditionally, i.e. not based on reciprocityunconditionally, i.e. not based on reciprocity Waivers adopted with a qualified majority of member states,Waivers adopted with a qualified majority of member states,

i.a. a wide waiver for developing countries i.a. a wide waiver for developing countries Art. XXIV: the MFN rules does not apply to customs unions and free trade Art. XXIV: the MFN rules does not apply to customs unions and free trade

areas areas -- stand-still (restrictions in respect of 3rd countries may not be greater than stand-still (restrictions in respect of 3rd countries may not be greater than

the average individual measures before the establishment of the union) the average individual measures before the establishment of the union) - Procedure for recognition of RTA’s (CU/FTA) by the CRTA (committee on Procedure for recognition of RTA’s (CU/FTA) by the CRTA (committee on

regional trade agreements) (recent example: EU-Canada CETA, EU-regional trade agreements) (recent example: EU-Canada CETA, EU-Singapore FTA concluded Oct 2014, EU Vietnam FTA concluded August Singapore FTA concluded Oct 2014, EU Vietnam FTA concluded August 2015, EU-US negotiations on TTIP, 2009 Asean-New Zealand FTA, ….)2015, EU-US negotiations on TTIP, 2009 Asean-New Zealand FTA, ….)

- Exception requires that substantially all trade in goods is liberalised Exception requires that substantially all trade in goods is liberalised between the member statesbetween the member states

Result: in relation to EU, the MFN principle applies in full only to ca. 9 Result: in relation to EU, the MFN principle applies in full only to ca. 9 countriescountries

Tariff restrictionsTariff restrictions

Art. XXVIIIbis GATT 1994: no prohibition of customs duties, Art. XXVIIIbis GATT 1994: no prohibition of customs duties, but duty to negotiate tariff concessions (lowering but duty to negotiate tariff concessions (lowering maximum tariffs) maximum tariffs)

- Doha-Round = 9th Round - Doha-Round = 9th Round - Reciprocity of concessions (all states concede advantages Reciprocity of concessions (all states concede advantages

of the same order)of the same order)- Maintaining the MFN principle: concessions apply to all Maintaining the MFN principle: concessions apply to all

contracting states contracting states - Technique of negotiations: linear tariff reductionsTechnique of negotiations: linear tariff reductions- Negotiating a formula for general reductions plus Negotiating a formula for general reductions plus

« negative lists » of exceptions« negative lists » of exceptions- Resulting in schedules product by product, consisting of 3 Resulting in schedules product by product, consisting of 3

parts (customs duties for MFN countries; preferential duties parts (customs duties for MFN countries; preferential duties for developing countries; non-tariff concessions) for developing countries; non-tariff concessions)

Tariff restrictions – Tariff restrictions – Harmonise customs Harmonise customs

regulations regulations Harmonise customs regulations by international rules for Harmonise customs regulations by international rules for

customs duties :customs duties : 1° Proper classification of the goods1° Proper classification of the goods 2° Determination of the customs value of the goods2° Determination of the customs value of the goods 3° Determination of the origin of the goods (where 3° Determination of the origin of the goods (where

relevant)relevant)

Simplification of customs procedures : Convention of Kyoto Simplification of customs procedures : Convention of Kyoto 1973/1999. Guidelines and recommendations concerning 1973/1999. Guidelines and recommendations concerning the clearing, storage, rules of origin, goods in transit, the clearing, storage, rules of origin, goods in transit, inward and outward processing, ..inward and outward processing, ..

Harmonise customs Harmonise customs regulations – classification regulations – classification

rules rules 1° Classification1° Classification Uniform product classification: « harmonised commodity Uniform product classification: « harmonised commodity

description and coding system » (HS Convention) of the WCO description and coding system » (HS Convention) of the WCO (World Customs Organisation), ca. 5000 commodity groups with (World Customs Organisation), ca. 5000 commodity groups with a 2 to 6 digit code, e.g. 01.01.11. Is usually revised every 5 a 2 to 6 digit code, e.g. 01.01.11. Is usually revised every 5 years.years.

Rules for the interpretation of the harmonised system: Rules for the interpretation of the harmonised system: - Product description has precedence over headings of sections Product description has precedence over headings of sections

and chaptersand chapters- Classification of unfinished products (as finished)Classification of unfinished products (as finished)- Products covered by more than 1 category: most specific Products covered by more than 1 category: most specific

descriptiondescription- Composite products or mixtures: most relevant characteristicComposite products or mixtures: most relevant characteristic- Products not covered classifed according to the most likenessProducts not covered classifed according to the most likeness- If unsettled: highest categoryIf unsettled: highest category

Harmonise customs Harmonise customs regulations – valuation rules regulations – valuation rules

& ROO & ROO 2° Valuation rules2° Valuation rules Customs valuation rules : in 1981 a Valuation Code, now the WTO Customs valuation rules : in 1981 a Valuation Code, now the WTO

Valuation agreement (art. VII GATT 1994 and 2 specific Valuation agreement (art. VII GATT 1994 and 2 specific agreements). Customs duties are in principle charged agreements). Customs duties are in principle charged ad valoremad valorem

- The value used is the transaction value (net price at the border) The value used is the transaction value (net price at the border) - Rules concerning evidence of the price (transaction value): Rules concerning evidence of the price (transaction value):

normally the invoice, otherwise the contract normally the invoice, otherwise the contract - Adjustment and splitting up of the purchase price (to determine Adjustment and splitting up of the purchase price (to determine

net price) (deduction of the price of connected services, transport net price) (deduction of the price of connected services, transport after importation, discounts, etc.). after importation, discounts, etc.).

- Exceptionally the transaction value can be rejected (sale between Exceptionally the transaction value can be rejected (sale between connected enterprises, artificial price) > question of transfer connected enterprises, artificial price) > question of transfer pricing (see OECD Transfer Pricing Guideliens 2010 and WCO pricing (see OECD Transfer Pricing Guideliens 2010 and WCO 2015 Guide to Customs Valuation and Transfer Pricing)2015 Guide to Customs Valuation and Transfer Pricing)

3° WTO Agreement on rules of origin (ROO) (no harmonisation yet)3° WTO Agreement on rules of origin (ROO) (no harmonisation yet)

Art. XI (Prohibition of)Art. XI (Prohibition of)Non-Tarif BarriersNon-Tarif Barriers

Art. XI GATT: prohibition of quantitative restrictions (QR) Art. XI GATT: prohibition of quantitative restrictions (QR) (quotas, etc) on import or export and other non-tariff barriers (quotas, etc) on import or export and other non-tariff barriers (NTB) with equivalent effect(NTB) with equivalent effect

(See further) General exceptions of art. XX, protection of the (See further) General exceptions of art. XX, protection of the balance of payments (art. XII/XVIII), safeguards (art. XIX), ... balance of payments (art. XII/XVIII), safeguards (art. XIX), ...

Specific exceptions on this prohibition in Art. XI. Especially the Specific exceptions on this prohibition in Art. XI. Especially the following are permitted if non-discriminatory: following are permitted if non-discriminatory:

- temporary export restrictions of essential products (shortage). temporary export restrictions of essential products (shortage). See e.g. dispute on Chinese restriction of export of raw See e.g. dispute on Chinese restriction of export of raw materials 2011materials 2011

- import restrictions on agricultural and fishery products as part import restrictions on agricultural and fishery products as part of a subsidising policy of a subsidising policy

- restrictions following from an international agreement on basic restrictions following from an international agreement on basic products (commodities) (s. further)products (commodities) (s. further)

Prohibition implies that state trading enterprises may not Prohibition implies that state trading enterprises may not circumvene the prohibition by using an import monopoly circumvene the prohibition by using an import monopoly

Annexed agreements on Annexed agreements on Non-Tarif BarriersNon-Tarif Barriers

Simplification of import licensing procedures: Simplification of import licensing procedures: Agreement on Agreement on import licensing proceduresimport licensing procedures (1979/1994) (1979/1994)

Separate rules on Textile & Clothing : MFA (Multifibre Separate rules on Textile & Clothing : MFA (Multifibre arrangement 1974) replaced by the ATC 1994 (arrangement 1974) replaced by the ATC 1994 (Agreement Agreement on Textile and Clothingon Textile and Clothing) and finally terminated 31 Dec. ) and finally terminated 31 Dec. 2004; since 1 Jan. 2005 no separate regime. 2004; since 1 Jan. 2005 no separate regime.

Voluntary export restraintsVoluntary export restraints (negotiated bilaterally) since (negotiated bilaterally) since 1988 incompatible with GATT1988 incompatible with GATT

Specific agreements annexed to GATT (in the package Specific agreements annexed to GATT (in the package deal): s. furtherdeal): s. further

Plurilateral agreementsPlurilateral agreements

Separate « plurilateral » agreements (outside the package Separate « plurilateral » agreements (outside the package deal):deal):

- P.A. on government procurement (in 1994 in Annex 4): next - P.A. on government procurement (in 1994 in Annex 4): next slideslide

Plurilateral Agreements with all WTO members as MFN:Plurilateral Agreements with all WTO members as MFN:- Plurilateral 1996 Information Technology Agreement ITA (70 Plurilateral 1996 Information Technology Agreement ITA (70

states: EU + circa 52) (merely tariff cutting agreement) (+ July states: EU + circa 52) (merely tariff cutting agreement) (+ July 24 2015 agreement reached to extend the scope of the ITA)24 2015 agreement reached to extend the scope of the ITA)

- In 2014 negotiations started for a P.A. on trade in In 2014 negotiations started for a P.A. on trade in « environmental goods » (mainly EU + Norway, Switzerland; « environmental goods » (mainly EU + Norway, Switzerland; USA & Canada; China, Japan, Korea; Australia & New Zealand) USA & Canada; China, Japan, Korea; Australia & New Zealand) (probably only tariff cutting)(probably only tariff cutting)

Government Procurement Government Procurement agreementagreement

GATT itself makes an exception for government GATT itself makes an exception for government procurement : it is expressly permitted to limit it to national procurement : it is expressly permitted to limit it to national products products

Annex 4 contains a separate « plurilateral » agreement – Annex 4 contains a separate « plurilateral » agreement – the GPA going further and excluding discrimination based the GPA going further and excluding discrimination based on nationality for important government purchases (goods on nationality for important government purchases (goods and services)and services)

- Parties: EU Member states, USA, Canada, Japan, NZ, Parties: EU Member states, USA, Canada, Japan, NZ, Singapore and 10 other countries (no developing Singapore and 10 other countries (no developing countries); China and Australia may joincountries); China and Australia may join

- NEW GPA agreed 2012 (« NEW GPA agreed 2012 (« Protocol Amending the Agreement on Government Procurement “), in force April 6, , in force April 6, 2014. 2014.

Government Procurement Government Procurement agreementagreement

- Scope of application: purchases above a treshold (generally Scope of application: purchases above a treshold (generally 130.000 SDR (IMF drawing rights; higher tresholds for local 130.000 SDR (IMF drawing rights; higher tresholds for local governments and certain utilities). New GPA Expanded scope governments and certain utilities). New GPA Expanded scope of application ratione personae (which governmental entities) of application ratione personae (which governmental entities) (eg towards local authorities); expanded scope as to (eg towards local authorities); expanded scope as to products, lower tresholds.products, lower tresholds.

- Rather an accumulation of bilateral agreements: based on Rather an accumulation of bilateral agreements: based on reciprocity reciprocity

- Detailed rules on tendering procedures in order to give Detailed rules on tendering procedures in order to give foreign enterprises a real chance (publicity, non-partisan foreign enterprises a real chance (publicity, non-partisan description); obligation to award the contract to the most description); obligation to award the contract to the most advantageous tender. Economic « compensation » may only advantageous tender. Economic « compensation » may only be taken into account under certain conditions .be taken into account under certain conditions .

- Rules on control and legal protection.Rules on control and legal protection.

NB: Within the EU, NAFTA etc. there are more specific rules.NB: Within the EU, NAFTA etc. there are more specific rules.

« National » treatment« National » treatment

Principle of national treatment: once imported, foreign products Principle of national treatment: once imported, foreign products have to be treated as national products – receive « national have to be treated as national products – receive « national treatment » (art. III GATT, prohibition of discriminatory internal treatment » (art. III GATT, prohibition of discriminatory internal measures) as regards:measures) as regards:

- (direct or indirect) internal taxes or other fiscal charges (art. III: 2);(direct or indirect) internal taxes or other fiscal charges (art. III: 2);- other regulations affecting their internal sale and offering for sale, other regulations affecting their internal sale and offering for sale,

transportation, distribution, use, etc. (art. III: 4).transportation, distribution, use, etc. (art. III: 4).

States often justify unequal treatment by invoking that the States often justify unequal treatment by invoking that the products are different. But « like products » have to be treated products are different. But « like products » have to be treated equally. equally.

The Appellate Body of the WTO has developed criteria for likeness The Appellate Body of the WTO has developed criteria for likeness in the case in the case AsbestosAsbestos (Appellate Body report of April 5, 2001). (Appellate Body report of April 5, 2001).

See also the See also the US - Clove cigarettes US - Clove cigarettes dispute 2012 (likeness between dispute 2012 (likeness between clove cigarettes and menthol cigarettes)clove cigarettes and menthol cigarettes)

General exceptions (art. XX)General exceptions (art. XX)

Art. XX GATT deals with the exceptions states Art. XX GATT deals with the exceptions states may invoke.may invoke.

An exception requires: An exception requires: - A relation to one of the grounds (aims or reasons) A relation to one of the grounds (aims or reasons)

listed in art. XXlisted in art. XX- AND AND - The general requirement that the measure does The general requirement that the measure does

not amount to an arbitrary or unjustifiable not amount to an arbitrary or unjustifiable discrimination or disguised restriction of discrimination or disguised restriction of international trade international trade

General exceptions (art. XX)General exceptions (art. XX) Main Grounds:Main Grounds:- (a) necessary to protect public morals (eg Seals products ban; Appellate (a) necessary to protect public morals (eg Seals products ban; Appellate

body reports 2014-1 & 2)body reports 2014-1 & 2)- (b) necessary to protect human, animal or plant life or health. E.g. (b) necessary to protect human, animal or plant life or health. E.g.

restriction on exportation of hazardous waste (incl. ships to be dismantled restriction on exportation of hazardous waste (incl. ships to be dismantled ((beachingbeaching), Hong Kong Convention 2009, implem. EU Reg. 1257/2013)), Hong Kong Convention 2009, implem. EU Reg. 1257/2013)

- (d) necessary to secure compliance with rules not inconsistent with GATT, (d) necessary to secure compliance with rules not inconsistent with GATT, esp. intellectual property rights esp. intellectual property rights

- For the protection of national artistic, historical or archaeological For the protection of national artistic, historical or archaeological treasures (N.B. UNESCO Convention 1970 allows wider exceptions) (in the treasures (N.B. UNESCO Convention 1970 allows wider exceptions) (in the EU export restrictions are uniformly regulated in Reg. 116/2009) EU export restrictions are uniformly regulated in Reg. 116/2009)

- (g) related to the conservation of exhaustible natural resources (NB. (g) related to the conservation of exhaustible natural resources (NB. environmental rules may constitute so-called « Green Barriers to Trade »)environmental rules may constitute so-called « Green Barriers to Trade »)

- As already mentioned:As already mentioned:- - in pursuance of agreements on basic products (commodities) - in pursuance of agreements on basic products (commodities) - - temporary export restrictions for products indispensable for local - temporary export restrictions for products indispensable for local

industry industry UN Human Rights Council Guiding Principles on Business and Human UN Human Rights Council Guiding Principles on Business and Human

Rights 2011Rights 2011

Harmonisation measures Harmonisation measures related to exceptions - related to exceptions -

generalgeneral Several distinct agreements to harmonise the rules Several distinct agreements to harmonise the rules

concerning some of the exceptions in order to diminish concerning some of the exceptions in order to diminish their impact. their impact.

Mainly the SPS and the TBT Agreements.Mainly the SPS and the TBT Agreements. To some extent also TRIPS (see further)To some extent also TRIPS (see further)

They include stricter obligations for the states than generally They include stricter obligations for the states than generally under GATT.under GATT.

Harmonisation measures Harmonisation measures related to exceptions: SPSrelated to exceptions: SPS

SPS: Agreement on Sanitary and Phytosanitary Measures (1994)SPS: Agreement on Sanitary and Phytosanitary Measures (1994)- such measures may be taken to protect animal or plant life or such measures may be taken to protect animal or plant life or

health health - But « only to the extent necessary », based on scientific principles But « only to the extent necessary », based on scientific principles

and sufficient scientific evidence of the risk and sufficient scientific evidence of the risk - Either because the risk is proven or by application of the Either because the risk is proven or by application of the

precautionary principle: even in the absence of sufficient precautionary principle: even in the absence of sufficient evidence, provisional measures are allowed subject to an evidence, provisional measures are allowed subject to an obligation to seek for additional information and review the obligation to seek for additional information and review the measure periodically measure periodically

- Only non-discriminatory measures (no different treatment without Only non-discriminatory measures (no different treatment without justification)justification)

- Measures have in principle to be based on international standards, Measures have in principle to be based on international standards, guidelines end recommendations; if based thereon they are guidelines end recommendations; if based thereon they are presumed to be necessary and thus allowed. presumed to be necessary and thus allowed.

Harmonisation measures Harmonisation measures related to exceptions: SPSrelated to exceptions: SPS

Who sets the « international standards » presumed to be Who sets the « international standards » presumed to be necessary and thus allowed ? necessary and thus allowed ?

The « three sisters »:The « three sisters »:- International Plant Protection Convention (IPPC), developing International Plant Protection Convention (IPPC), developing

international standards for phytosanitary measures (ISPMs)international standards for phytosanitary measures (ISPMs)- World Organisation for Animal health (OIE)World Organisation for Animal health (OIE)- the Codex Alimentarius Commission (FAO/WHO since 1963), the Codex Alimentarius Commission (FAO/WHO since 1963),

developing food (safety) standards.developing food (safety) standards.

Actual disputes or concerns relate to e.g.Actual disputes or concerns relate to e.g.- The EU approval regime for Biotech products (GMO rules) The EU approval regime for Biotech products (GMO rules)

(opposed by eg Argentina, USA)(opposed by eg Argentina, USA)

Harmonisation measures Harmonisation measures related to exceptions: TBTrelated to exceptions: TBT

TBT: Agreement on Technical Barriers to Trade (1980/1994)TBT: Agreement on Technical Barriers to Trade (1980/1994)- There are many possible technical barriers : provisions on There are many possible technical barriers : provisions on

quality, composition, packaging, control of goods, etc. quality, composition, packaging, control of goods, etc. - Justifications invoked : protection of public health and Justifications invoked : protection of public health and

safety, standardisation, etc. …safety, standardisation, etc. …

Harmonisation measures Harmonisation measures related to exceptions: TBTrelated to exceptions: TBT

TBT: Agreement on Technical Barriers to Trade (1980/1994)TBT: Agreement on Technical Barriers to Trade (1980/1994)- technical regulations (i.e. mandatory requirements) and standards (non-technical regulations (i.e. mandatory requirements) and standards (non-

mandatory) may not create unnecessary obstacles to international trade and mandatory) may not create unnecessary obstacles to international trade and may not be discriminatory (principle of MFN and « national treatment ») may not be discriminatory (principle of MFN and « national treatment »)

- Eg of a barrier: US Country-of-origin-labelling requirements (« COOL ») Eg of a barrier: US Country-of-origin-labelling requirements (« COOL ») impose burdens of verification and recordkeeping for imported parts impose burdens of verification and recordkeeping for imported parts (Appellate Body in 2012: violation of 2.1 TBT; possibly consistent with 2.2. (Appellate Body in 2012: violation of 2.1 TBT; possibly consistent with 2.2. TBT). American COOL-rules adapted in 2013. But another complaint by TBT). American COOL-rules adapted in 2013. But another complaint by Canada and Mexico led to a new condamnation of the US, upheld by the Canada and Mexico led to a new condamnation of the US, upheld by the Appellate Body in May 2015; US Congress gave in on Dec 18, 2015.Appellate Body in May 2015; US Congress gave in on Dec 18, 2015.

- Legitimate aims mentioned: protection of health and environment, Legitimate aims mentioned: protection of health and environment, prevention of deceptive practices, national securityprevention of deceptive practices, national security

- Rules deviating from international standards (ISO) are presumed to be Rules deviating from international standards (ISO) are presumed to be unnecessary unnecessary

- Rules not based on international standards (incl. in the absence of such) Rules not based on international standards (incl. in the absence of such) need to comply with procedural and substantive obligations (incl. prior need to comply with procedural and substantive obligations (incl. prior publication) (publication) (code of good practice code of good practice annexed to the TBT)annexed to the TBT)

- Particular rules for conformity examination of foreign products and for Particular rules for conformity examination of foreign products and for certification (in country of export).certification (in country of export).

Other exceptions : Other exceptions : National SecurityNational Security

Security exception in Art. XXI GATT: protection of Security exception in Art. XXI GATT: protection of national security national security

- i.a purchases for a military establishment i.a purchases for a military establishment - no particular regulation of this exceptionno particular regulation of this exception

Other exceptions: Balance Other exceptions: Balance of paymentsof payments

Art. XII GATT (+ understanding 1994): protection Art. XII GATT (+ understanding 1994): protection of the balance of payments of the balance of payments

- requires proportionality requires proportionality - duty to confer with the IMF on the measuresduty to confer with the IMF on the measures- give preference to tariff measures; quantitative give preference to tariff measures; quantitative

measures require a specific justification. measures require a specific justification.

Other exceptions:Other exceptions:Safeguard measures (art. Safeguard measures (art.

XIX)XIX)Economic emergency exception in Art. XIX: Economic emergency exception in Art. XIX: Safeguard measures against large import : Safeguard measures against large import :

-- Temporary measures in case of unforeseen increase Temporary measures in case of unforeseen increase of import of certain products causing serious injury of import of certain products causing serious injury to domestic industryto domestic industry

- - Conditions: temporary, non-discriminatory, Conditions: temporary, non-discriminatory, procedural requirements (investigation duties, etc.).procedural requirements (investigation duties, etc.).

- - More detailed rules in the More detailed rules in the Agreement on Agreement on SafeguardsSafeguards (not applicable to agricultural products). (not applicable to agricultural products). Measures directed against a single country are only Measures directed against a single country are only exceptionally permitted.exceptionally permitted.

Exceptions for agricultureExceptions for agriculture

Exceptions for agricultural products, such as : Exceptions for agricultural products, such as : - no prohibition or restriction of export subsidies no prohibition or restriction of export subsidies - quantitative restrictions in principle permitted quantitative restrictions in principle permitted - 1994: « Agreement on Agriculture » - merely a framework for 1994: « Agreement on Agriculture » - merely a framework for

negotiations; the aim is « tariffication », i.e. to convert all negotiations; the aim is « tariffication », i.e. to convert all quantitative restrictions in tariff restrictionsquantitative restrictions in tariff restrictions

- commitment to reduce export subsidies, starting with the listed commitment to reduce export subsidies, starting with the listed ones ones

- 3 categories (« boxes ») of domestic support measures: green 3 categories (« boxes ») of domestic support measures: green box (permitted), yellow (subject to reduction commitments) and box (permitted), yellow (subject to reduction commitments) and blue (permitted on production limitation conditions)blue (permitted on production limitation conditions)

- further commitments 2004, .... .further commitments 2004, .... .- In Doha round disagreement concerning domestic support of food In Doha round disagreement concerning domestic support of food

(US ><India) (India questions the actual calculation of the (US ><India) (India questions the actual calculation of the « Aggregate Measure of Support », i.e. allowed domestic subsidy)« Aggregate Measure of Support », i.e. allowed domestic subsidy)

WaiversWaivers

Art. XXV GATT: Apart from the exceptions in Art. XXV GATT: Apart from the exceptions in GATT, the WTO general council may (by 2/3 GATT, the WTO general council may (by 2/3 majority) waiver some of the GATT obligations for majority) waiver some of the GATT obligations for a specific state.a specific state.

-- Important waivers in favour of developing Important waivers in favour of developing countries (next slide)countries (next slide)

-- Some waivers contain additional exceptions for Some waivers contain additional exceptions for agricultural products.agricultural products.

Exc. for developing Exc. for developing countriescountries GATT in 1964/1966 supplemented with a « Part IV » on « trade and GATT in 1964/1966 supplemented with a « Part IV » on « trade and

development » (art. 36-38). Part IV has not really enforceable development » (art. 36-38). Part IV has not really enforceable obligations, at most duties of best efforts in favour of trade and obligations, at most duties of best efforts in favour of trade and development of developing countries. An important rule is that development of developing countries. An important rule is that there is no duty of reciprocity towards developed countries there is no duty of reciprocity towards developed countries

Principles promoted by UNCTAD (since 1968):Principles promoted by UNCTAD (since 1968):- Non-reciprocal and non-discriminatory tariff preferences for the Non-reciprocal and non-discriminatory tariff preferences for the

exportation of manufactured and semi-finished products from exportation of manufactured and semi-finished products from developing countries developing countries

Since 1971 (Tokyo round) a general waiver of provisions of GATT for Since 1971 (Tokyo round) a general waiver of provisions of GATT for developing countries, enabling a « general system of preferences » developing countries, enabling a « general system of preferences » (GSP) (so-called « enabling clause »)(GSP) (so-called « enabling clause »)

-- Allowing preferential treatment of developing countries; reciprocal Allowing preferential treatment of developing countries; reciprocal preferences between developing countries. Some conditions: no preferences between developing countries. Some conditions: no new trade restrictions vis-à-vis other contracting states; response to new trade restrictions vis-à-vis other contracting states; response to real needs; notification to GATT/WTO. real needs; notification to GATT/WTO.

- « Graduation rule »: aim to abolish gradually the preferential « Graduation rule »: aim to abolish gradually the preferential treatment treatment

Exc. for developing Exc. for developing countriescountries

Effect of the GSP is limited because of important exclusions: Effect of the GSP is limited because of important exclusions: agricultural products, steel, etc..agricultural products, steel, etc..

Application of the graduation rule has already led to reduction of Application of the graduation rule has already led to reduction of preferences for «newly industrialised countries ». The system has preferences for «newly industrialised countries ». The system has become more differentiated. become more differentiated.

Application 1: US GSP (general system of preferences)Application 1: US GSP (general system of preferences)-- Trade Act 1974/1976: preferential treatment for certain products Trade Act 1974/1976: preferential treatment for certain products

coming – according to the rules of origin – from the beneficiary coming – according to the rules of origin – from the beneficiary countries (the list of beneficiaries is a political decision often countries (the list of beneficiaries is a political decision often conditioned by the policy of countries in other matters)conditioned by the policy of countries in other matters)

- Supplementary measures in the African Growth & Opportunity Act Supplementary measures in the African Growth & Opportunity Act 2000 (textile)2000 (textile)

Application 2: EU GSPApplication 2: EU GSP- GSP 1971/1995/2005/2008 (Reg. 732/2008) – GSP 2012 in force 1 GSP 1971/1995/2005/2008 (Reg. 732/2008) – GSP 2012 in force 1

Jan 2014 (Reg. 978/2012)Jan 2014 (Reg. 978/2012)- Lomé/Cotonou Agreements for the « ACP countries »Lomé/Cotonou Agreements for the « ACP countries »

EU General system of tariff EU General system of tariff preferences (GSP) preferences (GSP)

GSP (originally 1971, adapted 1995, 2005, 2008, 2012):GSP (originally 1971, adapted 1995, 2005, 2008, 2012):- Preferential tariffs (- 15 % to - 100 %) for 4 categories of Preferential tariffs (- 15 % to - 100 %) for 4 categories of

goods goods - GSP+ status (further reductions in exchange for commitments GSP+ status (further reductions in exchange for commitments

on ecology and governance) in exchange for undertakings on ecology and governance) in exchange for undertakings (incl. implementing international conventions) of the (incl. implementing international conventions) of the exporting countries in relation to combating drug production exporting countries in relation to combating drug production and trafficking, labour standards, environmental protection, and trafficking, labour standards, environmental protection, etc. Applications are examined by the EU Commission.etc. Applications are examined by the EU Commission.

- An emergency safeguard clause An emergency safeguard clause - Graduation principle (for the least developed countries zero Graduation principle (for the least developed countries zero

tariff on « everything but arms » (EBA))tariff on « everything but arms » (EBA))- GSP 2012/in force 2014: number of beneficiary countries GSP 2012/in force 2014: number of beneficiary countries

lowered from 176 > 89. Annual review. As from Jan 2015 also lowered from 176 > 89. Annual review. As from Jan 2015 also no longer for China, Thailand etc.no longer for China, Thailand etc.

EU preferences for EU preferences for ACP countries ACP countries

Agreements with « ACP countries »: Lomé, then Cotonou (2000, in force Agreements with « ACP countries »: Lomé, then Cotonou (2000, in force 2002)2002)

Principles: no tariffs on non-agricultural products; favourable treatment of Principles: no tariffs on non-agricultural products; favourable treatment of agricultural products agricultural products

- No quantitative restrictions or equivalent measures except (1) measures No quantitative restrictions or equivalent measures except (1) measures for the protection of safety, health, etc .. (2) safeguard measuresfor the protection of safety, health, etc .. (2) safeguard measures

- Limited reciprocity: EU countries enjoy the same preferences as other Limited reciprocity: EU countries enjoy the same preferences as other developed countries developed countries

- Strict « Rules of origin » Strict « Rules of origin » - Obligations in the field of human rights, rule of law, fighting corruption, etc. Obligations in the field of human rights, rule of law, fighting corruption, etc. - Financing instruments, esp. 2 kinds : Financing instruments, esp. 2 kinds : • Grant facility, on the basis of needs and performanceGrant facility, on the basis of needs and performance• Investment Facility, to stimulate investment (esp. development of the Investment Facility, to stimulate investment (esp. development of the

private sector)private sector)

EU tries to limit the GSP to countries concluding an economic partnership EU tries to limit the GSP to countries concluding an economic partnership agreement (EPA) including trade in services, investments, government agreement (EPA) including trade in services, investments, government procurement and IP rights protection. Somemore limited regional EPA’s procurement and IP rights protection. Somemore limited regional EPA’s finalised in 2014 (West Africa, Sout African DC)finalised in 2014 (West Africa, Sout African DC)

Agreements on basic Agreements on basic products (commodities)products (commodities)

Under certain conditions justifying an exception to the GATT rules Under certain conditions justifying an exception to the GATT rules under art. XX (h) GATT.under art. XX (h) GATT.

General: import- and export restrictions for the stabilisation of General: import- and export restrictions for the stabilisation of market conditions in certain commodities market conditions in certain commodities

Informal agreements: consultative bodies of representatives of Informal agreements: consultative bodies of representatives of producing and consuming countries. Often organised by the FAO.producing and consuming countries. Often organised by the FAO.

Formal market regulation through a multilateral agreement Formal market regulation through a multilateral agreement between producing and consuming countries. Content varies:between producing and consuming countries. Content varies:

-- Rules on (fair) competition Rules on (fair) competition - Minimum prices (e.g. dairy) Minimum prices (e.g. dairy) - Export control, buffer stocks etc.Export control, buffer stocks etc. UNCTAD aims at an « integrated program » for basic products UNCTAD aims at an « integrated program » for basic products

agreements. A « Common Fund » was established (in effect 1989, agreements. A « Common Fund » was established (in effect 1989, but limited financial resources).but limited financial resources).

GATT & Competition law GATT & Competition law (trade defence)(trade defence)

Liberalisation of trade also requires rules against Liberalisation of trade also requires rules against anticompetitive practices (unfair trade practices) - also called anticompetitive practices (unfair trade practices) - also called « trade defence »« trade defence »

GATT & Codes: only indirect competition rules, concerning GATT & Codes: only indirect competition rules, concerning measures against dumping and measures against state aids. measures against dumping and measures against state aids.

Much more competition law in e.g. the EU (including prohibition Much more competition law in e.g. the EU (including prohibition of State Aid, with exceptions)of State Aid, with exceptions)

Incl. rules on measures against foreign practices: Trade Barriers Incl. rules on measures against foreign practices: Trade Barriers Regulation (Reg. 3286/94) (under revision)Regulation (Reg. 3286/94) (under revision)

Soft law: UNCTAD Code on Restrictive Business Practices:Soft law: UNCTAD Code on Restrictive Business Practices:Prohibition of cartels (esp. price agreements), of collusive Prohibition of cartels (esp. price agreements), of collusive tendering (for public tenders), market or customer allocation tendering (for public tenders), market or customer allocation arrangements, collective sales refusal, abuse of dominant arrangements, collective sales refusal, abuse of dominant position,…position,…

Soft law: OECD Recommendations Soft law: OECD Recommendations

GATT & ADAGATT & ADA(Anti-Dumping Agreement)(Anti-Dumping Agreement)

Rules: art. VI GATT + 1994 Anti-Dumping Agreement (ADA). Rules: art. VI GATT + 1994 Anti-Dumping Agreement (ADA). Object: determine under which conditions states may take Object: determine under which conditions states may take anti-dumping measures.anti-dumping measures.

Requirements:Requirements:- « dumping » : import below the price in ordinary course of « dumping » : import below the price in ordinary course of

trade for like product. ADA contains criteria to determine trade for like product. ADA contains criteria to determine normal price. Difference = « dumping margin »normal price. Difference = « dumping margin »

- Causing (threat of) material injury to domestic industry or Causing (threat of) material injury to domestic industry or retarding its establishment retarding its establishment

Procedural requirements:Procedural requirements:- Prior investigation of the alleged dumping and the resulting Prior investigation of the alleged dumping and the resulting

injury or threat on the local market injury or threat on the local market - Rights of defense of interested parties and access to Rights of defense of interested parties and access to

information information

GATT & ADAGATT & ADA GATT & Anti-Dumping Agreement - authorised sanctions : GATT & Anti-Dumping Agreement - authorised sanctions : -- If dumping margin > 2 %: anti-dumping duties not If dumping margin > 2 %: anti-dumping duties not

exceeding the dumping margin (« zeroing »); not for a exceeding the dumping margin (« zeroing »); not for a longer period than necessary (in principle max. 5 year – longer period than necessary (in principle max. 5 year – « sunset provision »)« sunset provision »)

- Provisional measures during the investigation (provisional Provisional measures during the investigation (provisional duties, security - usually mandatory deposits or bank duties, security - usually mandatory deposits or bank guarantees) guarantees)

WTO Committee on Anti Dumping PracticesWTO Committee on Anti Dumping Practices

Problem of retaliation threats against producers Problem of retaliation threats against producers complainingcomplaining

GATT & ADAGATT & ADA EU has further restricted the authorised antidumping measures (« WTO+ EU has further restricted the authorised antidumping measures (« WTO+

elements »):elements »):- May not be contrary to the overall interest of the EU (community interest May not be contrary to the overall interest of the EU (community interest

test)test)- Anti-dumping-duty not higher than necessary (« lesser duty rule »); but Anti-dumping-duty not higher than necessary (« lesser duty rule »); but

restriction is under discussion (EP proposes to abolish the rule in relation restriction is under discussion (EP proposes to abolish the rule in relation not countries not respecting ILO labour standards)not countries not respecting ILO labour standards)

- problem of determining dumping margin against enterprises from non-problem of determining dumping margin against enterprises from non-market economies (plus discussion whether esp. China is recognised as a market economies (plus discussion whether esp. China is recognised as a market economy or not)market economy or not)

Actual regulation: Reg. 1225/2009 (under revision)Actual regulation: Reg. 1225/2009 (under revision)- basically a competence of the EU Commission (under supervision of a basically a competence of the EU Commission (under supervision of a

(comitology procedure’)(comitology procedure’)- rights of defence maybe not guaranteed due to very wide confidentiality rights of defence maybe not guaranteed due to very wide confidentiality

claim by the EC (see WTO Case on Iron & Steel Fasteners/China) (in part claim by the EC (see WTO Case on Iron & Steel Fasteners/China) (in part remedied by installation of a ‘hearing officer’ guarding the procedural remedied by installation of a ‘hearing officer’ guarding the procedural rights)rights)

- control by courts is only marginal (either direct by EU corts or indirect via control by courts is only marginal (either direct by EU corts or indirect via member state courts)member state courts)

End 2012, EU had 102 anti-dumping measures in force and 10 anti-subsidy End 2012, EU had 102 anti-dumping measures in force and 10 anti-subsidy measures (impact on only 0,25 % of imports)measures (impact on only 0,25 % of imports)

GATT – SCM (subsidies and GATT – SCM (subsidies and countervailing measures) countervailing measures)

Rules: art. VI & XVI GATT + 1994 SCM Agreement (Subsidies & Rules: art. VI & XVI GATT + 1994 SCM Agreement (Subsidies & Countervailing Measures)Countervailing Measures)

Determines a) which subsidies are prohibited and b) in which cases Determines a) which subsidies are prohibited and b) in which cases countervailing measures against subsidies are allowedcountervailing measures against subsidies are allowed

Art. 1: Wide definition of subsidies (any state aid, domestic of for Art. 1: Wide definition of subsidies (any state aid, domestic of for export; benefit conferred by financial controbution or income or export; benefit conferred by financial controbution or income or price support) price support)

- Acceptable countervailing measures depend on the classification of Acceptable countervailing measures depend on the classification of the subsidy. 3 categories:the subsidy. 3 categories:

- Red list (art. 3, prohibited subsidies, measures authorised): a) export Red list (art. 3, prohibited subsidies, measures authorised): a) export subsidies, b) local content (or import substitution) subsidies (Eg: subsidies, b) local content (or import substitution) subsidies (Eg: Airbus / Boeing dispute)Airbus / Boeing dispute)

- Yellow list (art. 6-7, actionable subsidies, measures authorised if Yellow list (art. 6-7, actionable subsidies, measures authorised if subsidy has adverse effects)subsidy has adverse effects)

- Green list (art. 8, no countervailing measures authorised, « non-Green list (art. 8, no countervailing measures authorised, « non-actionable »): if either not « specific » or relating to a) research and actionable »): if either not « specific » or relating to a) research and development, b) regional development programmes or c) schemes development, b) regional development programmes or c) schemes to help adaptation to new environmental standardsto help adaptation to new environmental standards

SCM- countervailing SCM- countervailing measuresmeasures

Authorised unilateral Countervailing Measures against subsidies Authorised unilateral Countervailing Measures against subsidies (art. 10 ff)(art. 10 ff)

Additional duties (CVD’s: countervailing duties), when certain Additional duties (CVD’s: countervailing duties), when certain requirements are met :requirements are met :

- Prior investigation (according to prescribed procedure) (art. 11)Prior investigation (according to prescribed procedure) (art. 11)- Injury or threat of injury is proven (art. 15)Injury or threat of injury is proven (art. 15)- Level of duty may not exceed estimated level of subsidy (art. 19) Level of duty may not exceed estimated level of subsidy (art. 19)

(which means in practice no combination with anti-dumping (which means in practice no combination with anti-dumping duties, s. Appellate Body in duties, s. Appellate Body in US AD/CVD US AD/CVD case)case)

- Applied in a non-discriminatory manner (no matter what origin) Applied in a non-discriminatory manner (no matter what origin) - Duration in principle max. 5 year (art. 21)Duration in principle max. 5 year (art. 21) Provisional measures during the investigation (usually mandatory Provisional measures during the investigation (usually mandatory

deposits or bank guarantees) (art. 17)deposits or bank guarantees) (art. 17) Multilateral dispute settlement (art. 24): ask advice of the SCM Multilateral dispute settlement (art. 24): ask advice of the SCM

committee; or dispute settlement according to the general DSU of committee; or dispute settlement according to the general DSU of the WTO with some special or additional rules for SCM the WTO with some special or additional rules for SCM

Trade defence institutionsTrade defence institutions Anti-dumping measures, anti-subsidy measures and safeguards Anti-dumping measures, anti-subsidy measures and safeguards

are decided by « national » (in the EU: Union) bodiesare decided by « national » (in the EU: Union) bodies In the EU:In the EU:- Provisional measures and safeguards : by commission after advice Provisional measures and safeguards : by commission after advice

by an advisory committee (by an advisory committee (Anti-Dumping Committee – Regulation (EC) No 1225/2009 / Anti-Subsidy Committee – Regulation (EC) No 597/2009)

- Definitive anti-dumping or anti-subsidy measures require decision Definitive anti-dumping or anti-subsidy measures require decision of the EU Council (on the proposal of the EU Commission)of the EU Council (on the proposal of the EU Commission)

- Judicial review by ECJ possibleJudicial review by ECJ possible

In the USA: In the USA: - ITC (US International Trade Commission)ITC (US International Trade Commission)- US President has a vetoUS President has a veto- Judicial review by the US Court of international tradeJudicial review by the US Court of international trade

Trade in services: the GATS Trade in services: the GATS scope of applicationscope of application

General Agreement on Trade in Services 1993General Agreement on Trade in Services 1993 Scope of application:Scope of application:- « service »: any service, except in the exercise of « service »: any service, except in the exercise of

governmental functions governmental functions - « trade »: 4 modes of supply activities : « trade »: 4 modes of supply activities :

- cross-border supply, - cross-border supply, - consumption abroad, - consumption abroad, - commercial presence (establishment),- commercial presence (establishment),- presence of natural persons (service supplier - presence of natural persons (service supplier travels to provide service).travels to provide service).

GATS basic rulesGATS basic rules Basis principles (comp. GATT)Basis principles (comp. GATT)- All member states are «most favoured nation» (Art. II); exception All member states are «most favoured nation» (Art. II); exception

for regional integration (custom unions and free trade areas); in for regional integration (custom unions and free trade areas); in Annex II a list of exceptions (until 1-1-2005 allowed without any Annex II a list of exceptions (until 1-1-2005 allowed without any motivation)motivation)

- Prohibition in principle of 6 types of quantitative measures and Prohibition in principle of 6 types of quantitative measures and similar practices (Art. XVI) similar practices (Art. XVI)

- Principle of «national treatment» after import of « like services » Principle of «national treatment» after import of « like services » and « like service suppliers » and « like service suppliers »

- But both principles are limited: only specific undertakings of But both principles are limited: only specific undertakings of member states (Art. XVII)member states (Art. XVII)

- Duty of transparancy (duty to inform about rules affecting Duty of transparancy (duty to inform about rules affecting services) services)

- Progressive liberalisation through further negotiations .... (next Progressive liberalisation through further negotiations .... (next slide)slide)

- Exceptions & rules regarding exceptions (compare GATT) (Art. Exceptions & rules regarding exceptions (compare GATT) (Art. XIV)XIV)

- Special treatment for developing countriesSpecial treatment for developing countries

GATSGATS - Annexes - Annexes

General Agreement on Trade in Services 1993 – Main Annexes:General Agreement on Trade in Services 1993 – Main Annexes:- Annex II: exemptions from MFN principle stipulated by member Annex II: exemptions from MFN principle stipulated by member

states states - Annex on the Movement of natural persons: GATS does not apply Annex on the Movement of natural persons: GATS does not apply

to measures regarding migration, citizenship, etc. to measures regarding migration, citizenship, etc. - Annex Air transport services : GATS does not affect existing Annex Air transport services : GATS does not affect existing

international agreements (esp. Chicago Agreement 1944)international agreements (esp. Chicago Agreement 1944)- Annex financial services: freedom to take prudential measures Annex financial services: freedom to take prudential measures - Annex telecommunications (does not cover radio & TV): access for Annex telecommunications (does not cover radio & TV): access for

foreign service providers on reasonable and non-discriminatory foreign service providers on reasonable and non-discriminatory terms & conditions limitations enumerated restrictivelyterms & conditions limitations enumerated restrictively

Institutional: CTS (Council for Trade in Services)Institutional: CTS (Council for Trade in Services)

GATS & DOHA ROUNDGATS & DOHA ROUND Current commitments under GATS are very limitedCurrent commitments under GATS are very limited Doha Declaration 2001: “Doha Development Agenda” (DDA)Doha Declaration 2001: “Doha Development Agenda” (DDA) Meanwhile many PTA’s are concluded (Preferential Trade Agreements), Meanwhile many PTA’s are concluded (Preferential Trade Agreements),

thus undermining the MFN principlethus undermining the MFN principle 1998 Disciplines on Domestic Regulation in the Accountancy Sector1998 Disciplines on Domestic Regulation in the Accountancy Sector Impasse since 2008, DDA collapsedImpasse since 2008, DDA collapsed 2010 Draft “Disciplines on Domestic Regulation (of QLT requirements)”2010 Draft “Disciplines on Domestic Regulation (of QLT requirements)” (QLT = Qualifications, Licensing & Technical Standards)(QLT = Qualifications, Licensing & Technical Standards) Ministerial Conference 2011 allowed negotiations for a “plurilateral Ministerial Conference 2011 allowed negotiations for a “plurilateral

agreement”, negotiations for a Draft “International Trade in Services agreement”, negotiations for a Draft “International Trade in Services Agreement” (TISA) started March 2013 by EU + ca. 22 other countries Agreement” (TISA) started March 2013 by EU + ca. 22 other countries (incl. US). Draft on financial services on Wikileaks 14 April 2014, further (incl. US). Draft on financial services on Wikileaks 14 April 2014, further drafts leaked June 2015.drafts leaked June 2015.

EU has internally harmonised its commitments and renegotiated the EU has internally harmonised its commitments and renegotiated the change of the schedule with the states who raised objections change of the schedule with the states who raised objections (procedure of art. XXI GATS in case of partial withdrawal of (procedure of art. XXI GATS in case of partial withdrawal of commitments). Result: agreements with 18 states (ratification pending).commitments). Result: agreements with 18 states (ratification pending).

WTO DSU - generalWTO DSU - general

Apart from other dispute settlement procedures (conciliation, Apart from other dispute settlement procedures (conciliation, mediation, « arbitration » within WTO), there is the:mediation, « arbitration » within WTO), there is the:

DSU 1994 - Most well-developed law enforcement DSU 1994 - Most well-developed law enforcement mechanism in international public lawmechanism in international public law

Jurisdiction is * compulsory and *exclusiveJurisdiction is * compulsory and *exclusive Access to the procedure (« standing ») only for states and Access to the procedure (« standing ») only for states and

only in case of dispute (contentious: no advisory opinion can only in case of dispute (contentious: no advisory opinion can be asked)be asked)

- private parties can only lobby their member state (in the EU private parties can only lobby their member state (in the EU the European Commission) to lodge a complaint the European Commission) to lodge a complaint

- In several countries, an internal complaint procedure is In several countries, an internal complaint procedure is organisedorganised

- – – for the EU see the TBR (Trade Barrier Regulation))for the EU see the TBR (Trade Barrier Regulation))- - for the US, see S. 301 Trade Act 1974- for the US, see S. 301 Trade Act 1974

WTO DSU - procedure WTO DSU - procedure General characteristic: an integrated, i.e. largely uniform, General characteristic: an integrated, i.e. largely uniform,

system (instead of different dispute settlement rules for system (instead of different dispute settlement rules for different Codes) different Codes)

Stages:Stages:- Consultation (duty to enter into consultations)Consultation (duty to enter into consultations)- Procedure before a panel; request for a panel; Procedure before a panel; request for a panel;

establishment of a panel; terms of reference, intervening establishment of a panel; terms of reference, intervening parties, decisionparties, decision

- Appellate review (standing Appellate Body of 7 members Appellate review (standing Appellate Body of 7 members appointed for 4 years, 1 x renewable): only « issues of law » appointed for 4 years, 1 x renewable): only « issues of law »

- Adoption of report by the WTO Dispute settlement body Adoption of report by the WTO Dispute settlement body (DSB): adopted unless within 60 days DSB decides by (DSB): adopted unless within 60 days DSB decides by consensus not to adopt it (so-called reverse consensus). consensus not to adopt it (so-called reverse consensus). Effect: all adopted except 1Effect: all adopted except 1

- Monitoring and follow-up by the DSB (whether state Monitoring and follow-up by the DSB (whether state complies within RPOT, reasonable period of time)complies within RPOT, reasonable period of time)

WTO DSU - sanctionsWTO DSU - sanctions Sanctions / remedies for breach:Sanctions / remedies for breach: The DSB may authorise the complainant, in case the other The DSB may authorise the complainant, in case the other

party fails to comply with the decision, ‘retaliation’ – see party fails to comply with the decision, ‘retaliation’ – see art. 22 DSU:art. 22 DSU:

the retaliation must be proportional (not more than the the retaliation must be proportional (not more than the damage suffered by the complainantdamage suffered by the complainant

possible measures (in order of priority)possible measures (in order of priority)- suspension of trade concessions enjoyed by the non-- suspension of trade concessions enjoyed by the non-

compliant member state in the same sectorcompliant member state in the same sector- suspension of trade concessions in other sectors under the - suspension of trade concessions in other sectors under the

same agreementsame agreement- suspend concession under another agreement, esp. TRIPS - suspend concession under another agreement, esp. TRIPS

(i.e. suspension of recognition of intellectual property rights (i.e. suspension of recognition of intellectual property rights of the non-compliant member) (as TRIPS is a different of the non-compliant member) (as TRIPS is a different agreement, this is called cross-retaliation)agreement, this is called cross-retaliation)