Core Disciplines - GATS and GATT

Question 1

Case stating that GATT MFN applies to de jure and de facto discrimination.

Answer 1

ABR, Canada-Autos

Question 2

What is the three tier test for GATT MFN?

Answer 2

Panel, Indonesia-Autos:

1. Does measure confer a trade advantage (broad test - ABR, Canada-Autos)?
2. Are products like?
3. Is advantage granted immediately and unconditionally to like products?
   - More favourable import opportunities or Effects commercial relationship (EC-Bananas III)

Question 3

What GATT Art governs MFN?

Answer 3

GATT Art I

Question 4

What GATS Art governs MFN?

Answer 4

GATS Art II

Question 5

Case stating that GATS MFN applies to de jure and de facto discrimination.

Answer 5

ABR, EC–Bananas III

Question 6

Case rejecting aims-and-effects test for GATS MFN

Answer 6

ABR, EC–Bananas III

Question 7

Fundamental principle of national treatment under GATT.

Answer 7

Fundamental purpose of GATT Art III (NT) is to “ensure equality of competitive conditions between imported and like domestic products” (ABR, Canada-Periodicals)

Question 8

What GATT Art governs National Treatment?

Answer 8

GATT Art III

Art III:1 provides general principle that is expressed in specific obligations in Art III:2 and following (ABR, Japan–Alcoholic Beverages II).

Question 9

Is national treatment just a competition law analysis?

Answer 9

No - NT looks to “potential” for competition not just competition (Panel, Korea-Alcoholic Beverages)

Question 10

What is the scope of national treatment?

Answer 10

NT applies to internal not border measures (ABR, EC-Bananas III).

Though internal measures can be applied at the border (Argentina-Hides and Leather)

Question 11

Case that rejects aims-and-effects test for GATT national treatment?

Answer 11

ABR, Japan-Alcoholic Beverages II

Question 12

Is the effect of trade effect relevant to national treatment?

Answer 12

No need to show actual effect on trade, NT protects expectations of competitive relationship (ABR, Japan-Alcoholic Beverages II)

Question 13

How is national treatment applied under GATT Art III?

Answer 13

Art III:1 - general principle.

Art III:2 (taxes and charges).

• First Sentence (like products taxed equally)
• Second Sentence (purpose of dissimilar taxation)

Question 14

How is GATT Art III:2, first sentence applied? NT

Answer 14

TAXES AND CHARGES

Two questions (ABR, Japan-Alcoholic Beverages II)

1. Whether imported and domestic products are like? (see above)
2. Whether imported products are internally taxed in excess of domestic products directly or indirectly?
   a. No de minimis exception, any excess is too much.

NO NEED TO ESTABLISH PURPOSE.

If answer to both questions YES, violation.
If answer to only one question YES, go to second sentence.

Question 15

How is GATT Art III:2, second sentence applied? NT

Answer 15

Three questions (ABR, Japan - Alcoholic Beverages II):

1. Are imported and domestic products ‘directly competitive or substitutable’? (narrower than like products, price elasticity needed).
2. Are they ‘not similarly taxed’? (must be more than de minimis)
3. Is dissimilar taxation applied to ‘afford protection to domestic production’? (objective analysis)

Question 16

How is GATT Art III:4 applied? NT

Answer 16

REGULATIONS AND LAWS

First see if TBT applies (ABR, EC-Bananas III).

No need to look at purpose.

Three elements (ABR, Korea-Beef):

1. Like products.
2. Measure must be law/reg/requirement affecting internal sale, etc; and
3. Imported products accorded less favourable treatment.

Question 17

What GATS Art governs National Treatment?

Answer 17

GATS Art XVII

Question 18

How does GATS Art XVII work? (NT)

Answer 18

Test (Panel, China–Publications and Audiovisual Products):

1. Is service at issue inscribed in Member’s schedule?
2. What is extent of the Member’s national treatment commitment (including qualifications and conditions) re those services?
3. Does the measure at issue affect the supply of these services?
4. Does the measure accord less favourable treatment to foreign service suppliers compared to like domestic suppliers?
5. ‘Likeness’ – nature and characteristics of wholesale transactions are like when supplied in connection with wholesale service, irrespective of whether relates to EC bananas or non-traditional origin bananas (Panel, EC–Bananas III).
   a. No ‘aims-and-effects’ test.
6. If origin is only difference in terms of service, then they are like (Panel, China–Publications and Audiovisual Products).
7. “treatment no less favourable” assessed in terms of conditions of competition between like services/suppliers (Panel, China–Publications and Audiovisual Products).