wto law

II WTO ORGANIZATIONAL STRUCTURE (ART 4 WTO) 9

III DECISION MAKING IN WTO 10

IV SOURCES OF WTO LAW 10

V DISPUTE SETTLEMENT IN THE WTO 10

CHAPTER II: 16

BASIC PRINCIPLES OF WTO SYSTEM 16

I NON-DISCRIMINATION 16

1.1 MOST-FAVOURED-NATION TREATMENT (MFN) (ART I.1 GATT) 17

1.2 NATIONAL TREATMENT (NT) (GATT ART III) 19

II TRADE LIBERALIZATION (BINDINGS OF CONCESSIONS AND COMMITMENTS) 20

III EXCEPTIONS 21

IV TRANSPARENCY 22

CHAPTER III: 25

RULES OF MARKET ACCESS 25

I MARKET ACCESS FOR GOODS 25

1.1 BASIC FRAMEWORK AND DEFINITIONS 25

2.3.2 NATIONAL TREATMENT: ARTICLE XVII 28

2.3.3 ADDITIONAL COMMITMENTS: ARTICLE XVIII 29

1.1 DUMPING AND ANTI-DUMPING MEASURES 35

1.2 SUBSIDY AND COUNTERVAILING MEASURES 36

1.2.1 SUBSIDY 36

1.2.2 COUNTERVAILING MEASURES 38

II ECONOMIC EMERGENCIES 38

CHAPTER V: 43

RULES ON TECHNICAL TRADE BARRIERS 43

I TECHNICAL BARRIERS TO TRADE (TBT) 43

UNITED STATES — MEASURES AFFECTING THE CROSS-BORDER SUPPLY OFGAMBLING AND BETTING SERVICES (DS285) 55

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I SUMMARY OF THE CASE 55

1.1 PARTIES TO THE DISPUTE 55

1.2 BACKGROUND OF THE CASE 55

1.3 MAIN ARGUMENTS AND CURRENT STATUS 55

II THE ISSUE OF “LIKE SERVICE” 56

III SUMMARY OF THE PANEL’S REPORTS 59

IV LESSONS LEARNED 59

CASE 4: 64

EUROPEAN COMMUNITIES-MEASURES AFFECTING ASBESTOS ANDASBESTOS CONTAINING PRODUCTS, (WT/DS135/AB/R), AB REPORT, 12MARCH 2001 (EC-ASBESTOS) 64

I PARTIES TO THE DISPUTE 64

II BACKGROUND OF THE CASE 64

III MAIN ARGUMENTS AND CURRENT STATUS 64

IV DISCUSS THE FOLLOWING ISSUES 66

4.1 WHY IS THE “ACCORDION” OF LIKE PRODUCTS IN GATT ART III.4 INTERPRETED AS BROADER THAN THAT IN GATT ART III.2, FIRST SENTENCE? 66

4.2 WHAT CRITERIA WERE APPLIED IN ORDER TO DETERMINE “LIKE PRODUCTS” IN GATT ART III.4? 67

4.3 LESSONS LEARNED OR CASE COMMENTS 69

CASE 7: 73

INDONESIA-CERTAIN MEASURES AFFECTING THE AUTOMOBILE INDUSTRY,(WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12), PANEL REPORT,2 JULY 1998, (INDONESIA - AUTOS) 73

I PARTIES TO THE DISPUTE 73

II BACKGROUND OF THE CASE 73

III MAIN ARGUMENTS AND CURRENT STATUS 73

3.1 MAIN ARGUMENTS 73

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3.1.1 The main arguments of parties being under Article III:2 of GATT

3.1.2 The main arguments of parties being under Article I:1 of GATT 74

3.2 CURRENT STATUS 74

IV DISCUSS FOLLOWING ISSUES 74

4.1 HOW DUTY AND TAX EXEMPTIONS ACCORDED TO KOREAN IMPORTS WERE FOUND IN VIOLATION OF ART I:1 GATT? 74

4.2 HOW THE SALES TAX BENEFITS UNDER INDONESIA’S MEASURES VIOLATE BOTH ART III.2, FIRST AND SECOND SENTENCE? 75

4.3 HOW WAS THE WORD “UNCONDITIONALLY” INTERPRETED BY PANEL REPORT PARAS 14.143 - 14.147? 77

V COMPARING WITH VIETNAM’S SITUATION 78

CASE 11: 83

BRAZIL — RETREATED TYRES (DS332) 83

I PARTIES TO THE DISPUTE 83

II BACKGROUND OF THE CASE 83

III MAIN ARGUMENTS AND CURRENT STATUS 84

IV DISCUSS FOLLOWING ISSUES: 85

CASE 13: 92

CHINA — MEASURES AFFECTING IMPORTS OF AUTOMOBILE PARTS (DS342) 92

1 GENERAL INFORMATION 92

1.1 PARTIES TO THE DISPUTE 92

1.2 BACKGROUND OF THE CASE 92

1.3 MAIN ARGUMENTS AND CURRENT STATUS 93

2 DISCUSS FOLLOWING ISSUES 93

2.1 HOW WERE THE APPLIED MEASURES CONCLUDED TO VIOLATE: ARTS III:2 AND ART III:4 GATT 1994? 93

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2.2 DISCUSS THE ANALYSIS OF THE PANEL AND THE AB ON THE

VIOLATION OF GATT ARTS II:1 (A) AND (B) IN THE CASE 94

3 CASE COMMENTS 97

CASE 16: 100

EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURESAFFECTING TRADE IN LARGE CIVIL AIRCRAFT 100

1 PARTIES TO DISPUTE 100

2 BACKGROUND OF THE CASE 100

3 MAIN ARGUMENTS AND CURRENT STATUS 101

4 DISCUSS FOLLOWING ISSUES 102

CASE 17: 109

UNITED STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT– SECOND COMPLAINT (DS353) 109

I PARTIES TO DISPUTE: 109

II BACKGROUND OF THE CASE: 109

III MAIN ARGUMENTS OF THE PARTIES: 110

CASE 19: 123

INDONESIA - IRON OR STEEL PRODUCTS (VIETNAM) (DS496) 123

1 PARTIES TO THE DISPUTE 123

2 BACKGROUND OF THE CASE 123

2 BACKGROUND OF THE CASE 132

3 MAIN ARGUMENTS AND CURRENT STATUS 132

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4 DISCUSS FOLLOWING ISSUES 133

4 Discuss following issues 142

4.1 The issue of “international standard” in the case 142

4.2 Burden of proof on the “scientific risk assessments” as discussed in this case 144

4.3 Lesson learned or case comments 146

4.3.1 Case comment 146

4.3.2 Lesson learned for Vietnam 147

5 ASSESSMENT OF THE LECTURER 148

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 The world trade organization law, practice, and policy

 The law and policy of the world trade organization: text, cases and materials

 World trade law

 Legal problems of international economic relations: cases materials and text

 The world trading system: law and policy in international economic relations

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CHAPTER I:OVERVIEW OF WTO

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I MANDATE OF WTOFunction (Art III WTO):

 Administering WTO trade agreements  Forum for trade negotiations

 Settling trade disputes  the dispute organ plays an important role in a international organ, not only solves the disputes but also shows other meanings (in textbook)

 Reviewing members trade policies

 Cooperation with other international organizations

The Uruguay Round (1986 – 1994):

 Establing the WTO: The results of the Uruguay Round (UR) were signed inMarrakech, Morocco on 15 April 1994 The WTO came into being on 1January 1995 by virtue of the Agreement establishing the WTO.

 Scope: The scope of the multilateral trading system was broadened from

trade in goods (GATT) to encompass trade in services (GATS) and trade related aspects of intellectual property rights (TRIPS).

 The “Single Undertaking” concept: Every member state of the WTO is a

party to all the multilateral trade agreements under the WTO system and implement them equally.

 Trade dispute resolution mechanism: It is because that it is strong

enough and it have a full power, punishment for the violation Moreover, it makes WTO members to comply the resolution Besides, it is a tool enforcing the law Furthermore, both developed countries and underdeveloped countries have this mechanism.

Principles of the world trading system under the WTO:

 Trade without discimination:  Free trade

 Predictable – Transparency  Undistorted and fair competition

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II WTO ORGANIZATIONAL STRUCTURE (ART 4 WTO)

[Statement] All merber coutries are the member of General Council and Trade Policy Review Body and Dispute Settlement Body?

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III DECISION MAKING IN WTO

Consensus: The matter under consideration shall be deemed to be consensual

if no member present at the meeting to make the aforesaid decision formally

opposes the proposed decision (note no.1, WTO)One-member-one-vote:

approve waivers for member’s specific obligations

amendments to the Agreements, acceptance of new member(s)

Unanimity: all members agree to

approval a decision If a member keep silent, then the decision cannot be approved.

Amendments: Art IX WTO Agreement;

Art I, II GATT 1994 , Art II: 1 GATS,ART 4 TRIPS

IV SOURCES OF WTO LAW

Principal sources of law: (Article II WTO Agreement)

 Multilateral Agreements

 Plurilateral Agreements (government contracts, civil aircraft, bovine meat, dairy products)

Secondary sources of law:

 WTO dispute settlement reports;  Acts of WTO bodies;

 Agreements concluded in the WTO context;  Customary international law (opinio juris);  General principles of law;

 Other international agreements;

 The negotiating history (rapport preparatoir).

V DISPUTE SETTLEMENT IN THE WTOObjectives:

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 Clarify existing provisions of agreements in accordance with customary rules of interpretation of public international law

 Solving rising conflict: “POSITIVE SOLUTION – this is a solution that be (i)mutually acceptable to the parties to a dispute and (ii) consistent withthe covered agreements is clearly to be preferred In the absence of a

mutually agreed solution, the first objective of the dispute settlement

mechanism is usually to (iii) secure the withdrawal of the measures

concerned if these are found to be inconsistent with the provisions of any of the covered agreements The provision of compensation should be resorted to only if the immediate withdrawal of the measure is impracticable and as a temporary measure pending the withdrawal of the measure which is inconsistent with a covered agreement The last resort which this Understanding provides to the Member invoking the dispute

settlement procedures is the possibility of suspending the application ofconcessions or other obligations under the covered agreements on a

discriminatory basis vis-à-vis the other Member, subject to authorization

by the DSB of such measures (Art.3.7 DSU)”  the conflicts of dispute

mechanism are appeared due to members.

Scope (Art 1 DSU):

The rules and procedures of this Understanding shall apply to disputes

brought pursuant to the consultation and dispute settlement provisions of the agreements listed in Appendix 1 to this Understanding (referred to in this

Understanding as the "covered agreements1") The rules and procedures of this Understanding shall also apply to consultations and the settlement of disputes between Members concerning their rights and obligations under the provisions of the Agreement Establishing the World Trade Organization (referred to in this Understanding as the "WTO Agreement") and of this Understanding taken in isolation or in combination with any other covered agreement.

An integrated system:  Used by members only

 Applies to all the WTO multilateral agreements (Appendix 1) A single set of rules for all disputes (Art 23)

 Only a few special or additional rules in some agreements (Appendix 2)

1 GATT, GATS, TRIPS, SPS

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Main features:

 Compulsory jurisdiction2: The choice of nations depends on the legal bisis that those nations choose to bring a case3 (The disputes among WTO members or disputes relating the understanding are depended on WTO4)

 Detailed procedures and deadlines: Đây là b c th t c GATT không cóướ ủ ụ quy đ nh nàyị

 “Complainant-driven”: H th ng ph c v cho nguyên đ n Nguyên đ nệ ố ụ ụ ơ ơ có quy n g i đ n đ n DSB yêu c u thành l p Ban H i th m n u giai đo nề ử ơ ế ầ ậ ộ ẩ ế ạ th m v n th t b i nh ng Đ i s c a m i bên có quy n ph n đ i vi cẩ ấ ấ ạ ư ạ ứ ủ ỗ ề ả ố ệ thành l p Ban H i th m Không đ c s d ng consensus mà ph i dùngậ ộ ẩ ượ ử ụ ả negative-consensus

 “quasi-judical5”: Phán quy t c a c quan gi i quy t tranh ch p có thế ủ ơ ả ế ấ ể đ c xem xét l i b i c quan gi i quy t tranh ch p c p cao h nượ ạ ở ơ ả ế ấ ấ ơ

 “automaticity”Main characters:

 The DSB (all the members – Art 2.1 DSU)

 Parties

 Third Parties (Art 10 DSU)

 The Panel6 (3 or 5 panellists7 – Art 8.1 DSU) Appellate Body (7 persons – Art 17 DSU)

3 L a ch n qu c gia tranh ch p ph thu c vào c s pháp lý qu c gia kh i ki nựọốấụộơ ởốở ệ

4 Các tranh ch p gi a các thành viên WTO ho c các tranh ch p không gi a các thành viên nh ng liên quanấữặấữư

 Consultation phase8: Ch nguyên đ n và b đ n tham gia, thành viên WTOỉ ơ ị ơ không đ c tham gia N u tham v n đ c thì k t thúc v án N u thamượ ế ấ ượ ế ụ ế v n th t b i thì nguyên đ n có quy n yêu c u thành l p Ban H i th m.ấ ấ ạ ơ ề ầ ậ ộ ẩ

 Panel review: K t qu sẽ đ c th hi n trên 1 báo cáoế ả ượ ể ệ

 [AB review]: K t qu sẽ đ c th hi n trên 1 báo cáoế ả ượ ể ệ

 Adoption of report by the DSB: Báo cáo c a Panel và AB ch có hi u l củ ỉ ệ ự khi đ c thông qua b i DSBượ ở

 Implementation

 Good offices, conciliation and mediation possible at any stage

8 Giai đo n tham v nạấ

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 Non-discrimination is a requirement between imported goods and dosmetic goods so discrimination has two levels including tariff and non-tariff.

The price of specific products is low The price of specific products is fast It takes time to apply tariff

Ban the super tax

Not used in immediate situations due

The accuracy is more Diversity

T o ngu n thu ngân sách ạ ồ  Tuy nhiên, các qu c gia phát tri n khôngố ể quan tâm đ n v n đ này vì h đã hế ấ ề ọ ạ thu xu ng m c th p nh t.ế ố ứ ấ ấ

B o v hàng hoá n i đ aả ệ ộ ị Ki m soát hàng hoá vào và raể

1.1 MOST-FAVOURED-NATION TREATMENT (MFN) (ART I.1 GATT)

“With respect to customs duties and charges of any kind imposed on or in

connection with importation or exportation or imposed on the international

transfer of payments for imports or exports, and with respect to the method oflevying such duties and charges, and with respect to all rules and formalitiesin connection with importation and exportation, and with respect to allmatters referred to in paragraphs 2 and 4 of Article III,* any advantage,favour, privilege or immunity granted by any contracting party to any productoriginating in or destined for any other country shall be accordedimmediately and unconditionally to the like product originating in ordestined for the territories of all other contracting parties11.”

 Explain this above provision: There are 4 features including (i) like

product12, (ii) any advantage, favour, privilege or immunity granted by any members, (iii) immediately and unconditionally13 and (iv) exceptions.

 Through this provision, obligation is: “any advantage, favour, privilege or

immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and 11 all other contracting parties: WTO members

12 Like product: define in jurisprudence: (i) physical characteristics, (ii) end use, (iii) consumer

preference, (iv) tariff classification.

13 Immediately and unconditionally: A country may not discriminate between like products originating

in or destined for different countries Each WTO Member gets immediately and unconditionally the best treatment given to any other trading partner It is because that extending the benefits To be more specific,should choose the tariff because it is clear.

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unconditionally to the like product originating in or destined for the territories of all other contracting parties”

Coverage:

 Boder measures:

o Custom duties and charges on imports and exports o The method of levying such duties and charges

o All rules and formalities in connection with importation or exportation

 Internal measures:

o Internal taxes or internal charges (provided for in Art III.2)

o Internal regulation on sales, offering for sale, purchase,

transportation, distribution or use (provided for in Art III.4)

 Does VietNam negotiate all WTO members about tariff?

 Importing coutries should choose non-tariff

 T ch c thúc đ y t do th ng m i should choose tariffổ ứ ẩ ự ươ ạ

The Standard of Review:

 De jure:  De facto:

Exercise 1: 5% (ArtI:1); at least 5% (Art24)Exercise 2: No (ArtI:1)

Exercise 3: Yes Thu s n ph m c a n c không thành viên th p h n thìế ả ẩ ủ ướ ấ ơ không đ c cao h n thì đ c.ượ ơ ượ

Exceptions specific to MFN:

 Regional Preferences (Article XXIV)

o Art XXIV.8: Meet requirements to be considered as a C.U or a FTAo Art XXIV.5: The duties and other regulations of commerce

maintained to the trade of contracting parties not included in such area shall not be higher or more restrictive than the duties and regulations existing prior to the formation of the free-trade area

 “Enabling Clause” (1979 Decision)

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o Tariff Preferences from developed to developing countries (Generalised System of Preferences) (Case: EC-GSP, DS 246, 2004) o More favourable treatment with respect to Non Tariff Measures

o Regional or global arrangements between “less-developed countries” (reduction/elimination of tariffs and NTMs)

o Special treatment for Least developed countries (LDCs)

o Certain conditions must be fulfilled in order to grant preferences – e.g., non-discriminatory.

 Other exceptions:

o GATT Art XXIV.3 (frontier traffic)o GATT Art XX (General Exception)o GATT Art I:2-4 (Historical Preferences)1.2 NATIONAL TREATMENT (NT) (GATT ART III)

Principle: A country may not apply less favourable treatment to “like

products” of foreign origin once they have entered its territory.

 Article III:1 – General Principle Article III:2 – Internal Taxation Article III:4 – Internal Regulation

 Article III:5 – Internal Quantitative regulation

Art III:1 “The contracting parties recognize that internal taxes and otherinternal charges, and laws, regulations and requirements affecting theinternal sale, offering for sale, purchase, transportation, distribution or useof products, and internal quantitative regulations requiring the mixture,processing or use of products in specified amounts or proportions, should notbe applied to imported or domestic products so as to afford protection todomestic production.”

 General rules: “Members recognize that internal taxes and other internalcharges, and laws, regulations and requirements affecting the internal sale,offering for sale, purchase, transportation, distribution or use of Products,and internal quantitative regulations requiring the mixture, processing oruse of products in specified amounts or proportions, should not be appliedto imported or domestic products so as to afford protection to domesticproduction.”  No discrimination against imports in the internal market.

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Art III:2: “The products of the territory of any contracting party imported into

the territory of any other contracting party shall not be subject, directly or

indirectly, to internal taxes or other internal charges of any kind in excess ofthose applied, directly or indirectly, to like domestic products Moreover, no

contracting party shall otherwise apply internal taxes or other internal charges to

imported or domestic products in a manner contrary to the principles setforth in paragraph 1.*”

 A tax conforming to the requirements of the first sentence of paragraph 2 would be considered to be inconsistent with the provisions of the second

sentence only in cases where competition was involved between, on the onehand, the taxed product and, on the other hand, a directly competitive orsubstitutable product which was not similarly taxed.

Art III (4): “The products of the territory of any Member imported into theterritory of any other Member shall be accorded treatment no less favourablethan that accorded to like products of national origin in respect of all laws,regulations, and requirements affecting their internal sale, offering for sale,purchase, transportation, distribution or use ” (comply 3 conditions) 

Domestic regulation must not discriminate against foreign like products

Excercise I: ArtIII:2,1Excercise II:

 Ý 1: n u wrist thu c Astra thì đ c còn n u không thu c Astra thì khôngế ộ ượ ế ộ đ cượ

Exceptions to National Treatment:

 GATT Art III (3): Historical Preferences

 GATT Art III (8) (a): Government Procurement GATT Art III (8) (b): Production subsidies

II TRADE LIBERALIZATION (BINDINGS OF CONCESSIONS ANDCOMMITMENTS)14

Bindings of concessions and commitments:

agreed level of access to its market, on 14 Tự do hoá th ng m iươạ

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an MFN basis, for supplying countries.

maximum tariff levels – bound tariff

GATT Art XXVIII (Modifications of

Schedules)

Other duties and charges (ODCs):

 Includes other taxes which are only charged on the imports

 GATT Article II:1 (b) (second sentence) "Such products shall also beexempt from all other duties or charges of any kind imposed on or inconnection with the importation in excess of those imposed on the date

of this Agreement or those directly and mandatorily required to be imposed thereafter by legislation in force in the importing territory on that

date"  Members must include in Schedules any other duty or chargeexisting on by 15 April 1994.

III EXCEPTIONS

GATT Art XX: General Exceptions:

 “Chapeau”: “Subject to the requirement that such measures are notapplied in a manner which would constitute a means of arbitrary orunjustifiable discrimination between countries where the sameconditions prevail, or a disguised restriction on international trade,

nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Member of measures:”

 Sample exceptions:

o Necessary to protect public morals

o Necessay to protect human, animal or plant life or health

o Necessary to secure compliance with laws or regulations whichare not inconsistent with the provisions of this Agreement o Imposed for the protection of national treasures or artistic,

historic or archaeological value

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o relating to the conservation of exhaustible natural resources (if

such measures are made effective in conjunction with restrictions on domestic production or consumption)

 Two-tier analysis:

o Does the measure fall within one of the exceptions listed in Article XX? (see slide)

o Does the measure creates arbitrary or unjustifiable discrimination, and lead to disguised restriction on trade? (see slide)

 Security Exception: Nothing in this Agreement shall be construed:

o to require any Member to furnish any information the disclosure of which it considers contrary to its essential security interests; or o to prevent any Member from taking any action which it considers

necessary for the protection of its essential security interests

o to prevent any contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

CHAPTER III:

RULES OF MARKET ACCESS

 GATS

 Vietnam – Schedule of specific commitmentsI MARKET ACCESS FOR GOODS

1.1 BASIC FRAMEWORK AND DEFINITIONSWhat is Market Access?

 The term stands for the totality of government-imposed conditions

(regulations/measures) under which a product from one country may enter another country under non-discriminatory conditions.

 Market access = border measures (tariffs, tariff rate quotas, quantitative restrictions and other non-tariff measures)

How GATT/WTO ensuring market access?

 Predictable and growing access to markets for goods and services

 Basic Principles: Non discrimination (Most Favored Nations / National

Treatment) and Transparency

 Predictable: binding commitments

 Growing access: periodic “rounds” of negotiationsBasic GATT/WTO framework:

 Tariffs should normally be the only instrument used to protect domestic

 Tariffs should be transparent, predictable and stable

 Members’ commitments on tariffs are included in “Schedules ofconcessions”

 Quantitative restrictions (bans/restrictions) are generally prohibited(GATT Art XI) but are sometimes allowed as exceptions

 Definition: Duty levied at the border on goods going from one customsterritory to another (GATT Art I)

 Tariffs are not:

o an internal tax (GATT Art III:2)

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o a countervailing duty, anti-dumping duty (GATT Art VI)o a “fee” or a “charge” for an import service (GATT Art VIII)o “other duties and charges” (GATT Art II:1(b))

 Requirements on Tariffs:

o Security and predictabilityo A "bound" tariff

o “ceiling”Article II of the GATT:

“1.a Each contracting party shall accord to the commerce of the othercontracting parties treatment no less favourable than that provided for in theappropriate Part of the appropriate Schedule annexed to this agreement.

1.b The products ( ) shall, on their importation into the territory to which the

schedules relates, and subject to the terms, conditions or qualifications set forth

in that Schedule, be exempt from ordinary customs duties in excess of those setforth and provided therein”

1.2 SCHEDULES OF CONCESSIONSII MARKET ACCESS IN SERVICES

2.1 SERVICES DEFINEDDefinition and features:

 Intangible products that are not goods (tangible products)  No transfer or possession of ownership

o Non-storable

o exists at the same time they are bought and consumed

 Non-storability = proximity of supplier and consumer = non tradable

Trade barriers in service:

 A restriction on the number of drugstores allowed within a geographical area

 An obligation for all practicing lawyers to be a member of the local bar association

 Sanitation standards for restaurants

 Technical safety requirements for airline companies

 A requirement that all professional services are offered in the national language

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 Professional qualification requirements for accountants  A prohibition on banks to sell life insurance

GATS Art I.2: “For the purposes of this Agreement, trade in services is defined

as the supply of a service:

(a) from the territory of one Member into the territory of any other Member;

[Mode 1]

(b) in the territory of one Member to the service consumer of any other

Member; [Mode 2]

(c) by a service supplier of one Member, through commercial presence in the

territory of any other Member; [Mode 3]

(d) by a service supplier of one Member, through presence of natural persons

of a Member in the territory of any other Member [Mode 4]

Domestic Regulation (administration of measures of general application; licensing requirements)

Payments and Transfers

2.3 SPECIFIC COMMITMENTS

2.3.1 MARKET ACCESS: ARTICLE XVI

The GATS does not explicitly define the concept of ‘market access barriers’.

Article XVI GATS:

 With respect to market access through the modes of supply identified in

Article I, each Member shall accord services and service suppliers of anyother Member treatment no less favourable than that provided for under

the terms, limitations and conditions agreed and specified in its Schedule.

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 In sectors where market-access commitments are undertaken, the

measures which a Member shall not maintain or adopt either on thebasis of a regional subdivision or on the basis of its entire territory, unlessotherwise specified in its Schedule, are defined as:

o (a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;

o (b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;

o (c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;

o (d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;

o (e) measures which restrict or require specific types of legalentity or joint venture through which a service supplier maysupply a service; and

o (f) limitations on the participation of foreign capital in terms ofmaximum percentage limit on foreign shareholding or the totalvalue of individual or aggregate foreign investment.

Members have flexibility to specify limitations on market access and national treatment + additional commitments.

Market access under the GATS is not automatic but subject to specific commitments of each members.

Members can schedule limitations on market access and national treatment

2.3.2 NATIONAL TREATMENT: ARTICLE XVII

“1 In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set out therein, each Member shall accord to services and service suppliers of any other Member, in respect of all measures affecting the supply of

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services, treatment no less favourable than that it accords to its own like services and service suppliers.

2 .”

2.3.3 ADDITIONAL COMMITMENTS: ARTICLE XVIII

“Members may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles XVI or XVII, including those regarding qualifications, standards or licensing matters Such commitments shall be inscribed in a Member's Schedule.”

2.4 SERVICES SCHEDULE

Vietnam – Schedule of specific commitments:

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List of Art II (MFN) Exemptions:

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III QUESTIONS

1 Is it possible for a foreign company to establish subsidiaries for pharmaceutical distribution services in Vietnam? (pharmaceutical distribution is not currently included in Vietnam's Schedule of Commitments)

Vietnam – schedule of specific commitments không quy đ nh v v n đ này.ị ề ấ ề

2 Are there any restrictions outlined in Vietnam's Schedule of Commitments that pertain to the establishment of an enterprise (Mode 3) engaged in research and development services?

3 If a foreign company plans to enter Vietnam to provide management consulting services (CPC 865), are there any specific considerations that need to be taken into account?

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Art VI:1 GATT 1994: “The contracting parties recognize that dumping, by

which products of one country are introduced into the commerce of another

country at less than the normal value of the products, is to be condemned if itcauses or threatens material injury to an established industry in the territory

of a contracting party or materially retards the establishment of a domestic industry.”

Art 2.1 ADA “For the purpose of this Agreement, a product is to be consideredas being dumped, i.e introduced into the commerce of another country at lessthan its normal value, if the export price of the product exported from onecountry to another is less than the comparable price, in the ordinary course oftrade, for the like product when destined for consumption in the expor;ng

Art 2.2 ADA: “When there are no sales of the like product in the ordinarycourse of trade in the domestic market of the exporting country or when,because of the particular market situation or the low volume of the sales in

the domestic market of the exporting country, the margin of dumping shall be

determined by comparison with a (1) comparable price of the like productwhen exported to an appropriate third country, or with (2) the cost ofproduction in the country of origin plus a reasonable amount foradministrative, selling and general costs and for profits.”

[QT] Does WTO ban dumping?

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Measures against dumping: Anti-dumping measure shall be applied only to

prevent foreign dumped imports to hurt (cause injury or threaten to cause injury

to) domestic industry (Art VI GATT)Requirements:

 Dumping  Injury  Causal link

[QT] M c đ thi t h i gi a 3 công c là khác nhau?ứ ộ ệ ạ ữ ụ

1.2 SUBSIDY AND COUNTERVAILING MEASURESLegal basis:

 Article XVI GATT 1994

 WTO Agreement on Subsidies and Countervailing Measures (SCM)General:

 Countervailing System: Similar to Antidumping System

 To remedy foreign imports receiving subsidies from the state which cause or threaten to cause injury to domes9c industry of importing country

1.2.1 SUBSIDY

Definition of subsidy:Art 1 SCM:

“(a) (1) there is a financial contribution by a government , i.e where:

(i) a government practice involves a direct transfer of funds (e.g grants, loans,and equity infusion), potential direct transfers of funds or liabilities (e.g loanguarantees);

(ii) government revenue that is otherwise due is foregone or not collected (e.g.fiscal incentives such as tax credits);

(iii) a government provides goods or services or purchases goods;

(iv) a government makes payments to a funding mechanism, or entrusts ordirects a private body to carry out one or more of the type of functions illustrated in(i) to (iii) above

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(a) (2) there is any form of income or price support in the sense of Article XVI of

Subsidy must be specific to an enterprise or industry or group ofenterprises or industries: [Article 2 SCM]

 Prohibited Subsidies (Art 3 + Annex I)  Non-Actionable Subsidies (Art 8)  Others (Art.5)

Prohibited Subsidies – Art 3 SCM, Annex 1:

 Art.3.1(a): Export subsidies: subsidies contingent, in law or in fact,whether solely or as one of several other conditions, upon exportperformance, including those illustrated in Annex I;

 Art 3.1(b): Import Substitution Subsidies: subsidies contingent, whether

solely or as one of several other conditions, upon the use of domestic over imported goods.

Non-Actionable Subsidies - Art 8 SCM

“8.1 The following subsidies shall be considered as non-actionable:

(a) subsidies which are not specific within the meaning of Article 2; (EX: After

COVID the benefit from government for all business  not specific subsidy)

(b) subsidies which are specific within the meaning of Ar7cle 2 but which meet allof the condi7ons provided for in paragraphs 2(a), 2(b) or 2(c) ”

Other subsidies – Art 5:

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“No Member should cause, through the use of any subsidy referred to in

paragraphs 1 and 2 of Article 1, adverse effects to the interests of other

Members, i.e.:

(a) injury to the domestic industry of another Member; ”

1.2.2 COUNTERVAILING MEASURESWhat to do with subsidies:

 The unilateral CVD track  Multilateral remedy track

[QT] Có ph i t t c s n ph m đ c nh n tr c p t qu c gia đ u ph i tr iả ấ ả ả ẩ ượ ậ ợ ấ ừ ố ề ả ả qua bài ki m tra này không?ể

II ECONOMIC EMERGENCIESSafeguard:

Rules on economic emergencies of safeguard:  Safeguard measures

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 Purpose and objective of Safeguard measures  Substantive requirements

 Characteristics of, and conditions relating to, the safeguard measures  S&D and compensation

Legal basis for Safeguard actions in the WTO: Article XIX of GATT 1994

 WTO Agreement on Safeguards (SA)Escape Clause:

 GATT, Art XIX contains “escape clause” permitting reimposition of tariffs or quotas as a result of increasing imports causing serious injury to domestic producers

 This language found in GATT 1947 and most other trade agreements

Article XIX:1 GATT 1994:

“1 (a) If, as a result of unforeseen developments and of the effect of theobligations incurred by a contracting party under this Agreement, includingtariff concessions, any product is being imported into the territory of thatcontracting party in such increased quantities and under such conditions asto cause or threaten serious injury to domestic producers in that territory of

like or directly competive products, the contracting party shall be free, in respect of such product, and to the extent and for such time as may be necessary to

prevent or remedy such injury, to suspend the obligation in whole or in part or

to withdraw or modify the concession”

Compensation and Suspension of Substantially Equivalent Obligations:

“Art 8 SA

1 A Member proposing to apply a safeguard measure or seeking an extension of

a safeguard measure shall endeavour to maintain a substantially equivalent level

of concessions and other obligations to that existing under GATT 1994 .the

Members concerned may agree on any adequate means of trade compensation forthe adverse effects of the measure on their trade.

2 If no agreement is reached within 30 days .then the affected exportingMembers shall be free , to suspend the application of substantially equivalentconcessions or other obligations under GATT 1994, to the trade of the Member

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applying the safeguard measure, the suspension of which the Council for Trade inGoods does not disapprove.

3 The right of suspension referred to in paragraph 2 shall not be exercised forthe first three years that a safeguard measure is in effect, provided that thesafeguard measure has been taken as a result of an absolute increase in importsand that such a measure conforms to the provisions of this Agreement”

Safeguards measures differ from AD/CVD measures:

 no "unfair" trade practice

 injury at a higher level (serious injury vs material injury)  to a large degree, applied on a MFN basis

 compensation to affected trading partners.

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