International Economics Law

à Must do a risk map when starting a company

· Probability of Occurrence vs mitigation

Risk Map and Bilateral Investment Treaty

Risks when opening a big chain business

· Local business complaining

- They can’t compete

- They take the best employees

- They take the best beach

· Political Pressure from the locals

· Demonstration

· No police protocol

· Local Supply Boycott

1. Government Regulations: Natural Park to protect the environment and get the
property expropriate

2. Tax Holiday Cancellation

3. Employee problems

4. No operational permit

à A constitution of laws making laws to put limits on the government decision power

- The government cannot expropriate your property

- Bilateral Investment Treaty: A Bilateral Investment Treaty is designed to

ensure that U.S. investors receive national or most favored nation
treatment (whichever is better) in the other signatory country.

à Ex: Australian tobacco packaging labeling war à tobacco companies losing their
trademarks (property) because of their power decision.
 - Investment Treaty Arbitration: Each party picks an arbitrator who will chose a
third arbitrator and will decide the outcome of the case.

- Then the loser party will have to pay

- If they refuse to pay the winner party might take any assets form the loser
party government as compensation

- You may go to different courts in order to protect your investment

- Only works when between developed and developing countries (bilateral)

- You might have more benefits as an investor than a local

- In the case of product-based companiesà companies can argue that the

government were taking away their trademark (brand)

- In every business you must have a corporate affairs team to actually operate
in the market

**Usually under EU regulatory law if product is approved by the Dutch law, it should
be able to operate all around EU territory

Bilateral Investment Treaty:

All bilateral investment treaty with the Dominican Republic

A Bilateral Investment Treaty is designed to ensure that U.S. investors receive national
or most favored nation treatment (whichever is better) in the other signatory country.
It protects U.S. investors against performance requirements, restrictions on transfers and
arbitrary expropriation.

GATT AND WTO

If a product is accepted by one of the EU members it will be accepted by other EU members

because of the common market agreement but each member country can have
specifications

- Packing and labeling must be adapted to the different languages

- NO lab testing is required

If one of the EU members will not allow an EU product to enter the EU they can go the EU
court to enter the German market.

à The Dutch government can sue the German contract

Basic Principle of WTO

Removal of barriers to trade

- Prohibition on the use of quantitative restriction. No new barriers to trade and

negotiate away current barriers, such as measures such as import bans or quotas that
restrict quantities selectively

- At the border: only duties and no other burdensome requirements relating to

importation that functions as a disincentive to importation other than duties, taxes or
other change

- Examples:

· Import/licensing schemes

· Import/export quotas, and minimum import prices

· Restrictive use of import or export licenses

· Controls of payments concerning products transactions as a form of

protectionism

· State monopolies cannot be used to restrict imports

 · Developing countries can be given privilege if they have balance of
payment problems.

à There are limits on what a country can do as the World can sanctions
different countries.

àIn a way countries will give up power to international organization to trade.

Trade Without Discrimination

National treatment: Treating foreigners and locals equally Imported and locally-produced
goods should be treated equally — at least after the foreign goods have entered the market.
The same should apply to foreign and domestic services, and to foreign and local
trademarks, copyrights and patents.

· Products must be treated no less favourably than national products in terms of

internal taxes or other internal charges of any kind and internal regulations and
requirements affecting their “internal sale, offering for sale, purchase, transportation,
distribution or use.”

· Quantitative regulations establishing local content obligations are expressly

prohibited.

Exam: A determination of an internal tax's inconsistency with GATT Article III:2, first
sentence, is a two-step process:

1.The imported and domestic products at issue must be "like“,

2. The internal tax must be applied to imported products "in excess of" those applied to the
like domestic products.

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) down
minimum standards for many forms of intellectual property (IP) regulation as applied to
nationals of other WTO Members

TRIPS contains requirements that nations laws must meet for

Ø trademarks;

Ø patents;

Ø copyright rights, including the rights of performers, producers of sound

recordings and broadcasting organizations;
 Ø geographical indications, including appellations of origin;

Ø industrial designs;

Ø integrated circuit layout-designs;

Ø monopolies for the developers of new plant varieties;

Ø trade dress; and undisclosed or confidential information.•

Exceptions

Under the treaties referenced above, Public morals or public health defence may be
available

Which affords governments the opportunity to attempt to “justify” violations

For example - measures which would otherwise constitute a breach of GATT can be
excused under Article XX, which provides:“nothing in this Agreement shall be construed
to prevent the adoption or enforcement by any contracting party of measures…
necessary to protect human… health;”

à Example: A country can say since BRACK has aspirin it can only sell it in pharmacy

à Brack can fight this but the country can argue that the measure is justifiable

- Mexico has to prove NECESITY

à They are restricting you to protect their populations

EXAM: GATT ARTICLE XX

“Subject to the requirement that such measures are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between countries where
the same conditions prevail, or a disguised restriction on international trade, nothing in this
Agreement [the GATT] shall be construed to prevent the adoption or enforcement by any
contracting party of measures: ...

(a) necessary to protect public morals

b) necessary to protect human, animal or plant life or health;...

(g) relating to the conservation of exhaustible natural resources if such measures are
made effective in conjunction with restrictions on domestic production or consumption. ...”

(Article XIV of the GATS contains the same introductory clause and the same paragraphs
(a) and (b) — but it does not contain an equivalent to paragraph (g))

What this means?

Governments have the opportunity to attempt to “justify” violations when they can satisfy a
two-tier test:

1. That its measure falls under at least one of the exceptions (e.g. health , public
morals, etc) under Article XX) and, then,
2. that the measure satisfies the requirements of the introductory paragraph (the
“chapeau” of Article XX), i.e. that it is not applied in a manner which would constitute
“a means of arbitrary or unjustifiable discrimination between countries where the
same conditions prevail”, and is not “a disguised restriction on international trade”.

Necessity gives rise to Proportionality Analysis

Would require a demonstration that the measure:

a) would work to help achieve the identified objective

b) In addition, there would have to be no less trade-restrictive options that

could have the same effects.

- The US credit card prohibition created a technical barrier of trade to online gambling
business in Dominican Republic, the business will comply that they are violating the
WTO conditions but the US argued that gambling is harmful to health.

IMF and The World Bank

International Monetary Fund: Help state in dealing with balance of payment problems

Short-term loans of foreign currencies

à Generally followed dictation/change in policies to enable monetary stability

à Balance payment problems

The IMF applies conditioning to countries when lending money such as passing different
laws that ensure growth and development.

à Argentina Vs IMF

World Bank

Long term loans for poverty/ development related projects

à Reconstruct different countriesz

à Improving infrastructure

The World Bank also applies conditioning to countries when lending money

· Laws come from courts, parliaments supreme courts and other sources of law that
are based on customs

· As a business owner you need to be aware of the domestic and international

economics laws

Spain-International Corruption

Corruption has been identified as the No. 1 impediment for development

Myth: In developing countries you often have to pay to secure contracts or unblock
administrative delays. Everyone does it. It’s a cultural. No problem

The Spanish legislature has reinforced laws against the payment of foreign bribes which now
allows prosecution in Spanish for the payment of bribes outside Spain

Until Feb 2017, no legal or physical person had been prosecuted for the crime of
international corruption

Elements of the Offense

· By the way of an offer, promise or concession

 · Of any benefit or undue advantage, either pecuniary or otherwise

· Corrupting or with the intention to corrupt either directly or through an intermediary a

public official for the benefit of the actor or a third party

· Or accepting such a request

· With the intention of inducing said public official to act or abstain from acting in
relation to their public dates.

· To obtain o maintain a contract, business or any other competitive advantage with

respect to international economic activities.

Sentence for the Spain-International Corruption Case

· One year prison

· Six months fine

· Barred from public contracts (most of their clients were public schools)

· Loss of any tax incentive

Foreign Law with extraterritorial effect

Myth: Foreign anticorruption laws are not applicable to Spanish companies

· FCPA imposes sanctions on companies with activities in the US, for bribes paid
anywhere in the world.

· Actions may be either civil or criminal against the companies or individuals

· Extraterritorial Jurisdiction: Lebanese Tobacco company with UK links can be still

prosecuted under UK law

4 of 4 pr

Foreign Law with extraterritorial effect

Foreign Corrupt Practices Act

· The US department of Justice can act whenever any preparatory conduct or the bribe
itself has any of the following contracts with the US:

- Conspiracy to bribe

- Use of US currency

- Servers located on US soil

- Banks accounts in US banks

- Companies set up under US jurisdiction

US law is applicable to companies that trade on US exchange including secondary markets

(including depository receipts)

Ex: Siemens, KBR, Odebrecht (corruption and bribery cases)

7 out of 10 top fines were imposed on foreign companies

Bribery Case Examples

- BHP Billiton: Prosecuted in the US for bribery under “too much corporate
hospitality” because the collect funds in the US.

- Bay Mellon

- Cadbury

- Ignacio Cueto: Lan Chile airlines got prosecuted from 20 million for barbering
labor officials in Argentina

- AztraZeneca

- Pharmacies bribing doctors to prescribe their drugs

Things consider a bribe can be consider very simple things

Not just a matter for large companies

Smith and Wesson

In the middle east business people will send a $11,000 giftàand it will end in a fine of $
2million because it can be considered as a fine.

What does this mean

· Doesn’t only apply to large companies

· Gift, gratuities and payment that may seem culturally appropriate may give rise to
great risk

· Good intentions are no defense or excuse

Examples

· Accepting a CV and offering employment to relative

Conclusion

· Compliance program International Corruption

- Establish procedure for investigation and adequate protections for

“Whistleblowers”

- Continuous auditing of operations

- Due diligence when contracting commercial partners, agents and distribution

- Certification of understanding and compliance with procedures

- Contractual provision re compliance, right to audit, right to terminate

- Prohibitions on payments over market price in re commissions

à No proper files

- Maintain files on all commercial plans

If caught doing bribery:

**Teamder can be prosecuted in the US, Spain and Equatorial Guinea and might not be able
to do business again.

REMEMBER:

àAny contact with the US might subject you to US jurisdiction.

EXAM:

EXAM: HYPOTHETICAL 1

Looks not discriminatory but actually all Mexican use sugar cane for their products so its
affecting international companies.

Mexico imposed on soft drinks and other beverages that use any sweetener other than cane
sugar.

Ø Tax measures including:

(i) a 20 percent tax on soft drinks and other beverages that

use any sweetener other than cane sugar (“beverage tax”),
which is not applied to beverages that use cane sugar; and

(ii) a 20 percent tax on the commissioning, mediation, agency,

representation, brokerage, consignment and distribution of soft
drinks and other beverages that use any sweetener other than
cane sugar (“distribution tax”).

· In Mexico, cane sugar is the overwhelmingly dominant sweetener, while in the United
States the sweetener of choice for soft drink and syrup production is HFCS.

· How might the US challenge the measure?

· How might Mexico justify the measure?

à This is actually a discrimination against international products by taxing them as

Mexico is benefiting local products.

à They are actually violating there WTO agreement and is important for companies to
know how to deal with government through arbitrage and article XX.

HYPOTHETICAL 2

In China, the Ministry of Industry and Information Technology (MIIT),

State Information Office and Ministry of Public Security (MPS) is the lead government
agency that maintains control over all cross-border Internet communication through a
firewall, popularly known as “the Golden Shield”.

· It blocks access to at least 18,000 foreign websites. MPS monitors the Internet
(including VoIP and various instant messaging protocols like Twitter as well as
SMS/MMS traffic going in or out of the country.

· Domestic sites, on the other hand, are not blocked but are subject to local laws and
enforcement: they can be shut down at source rather than blocked.

· China also planned to introduce a filtering software called the Green Dam Youth
Escort on every PC sold in the country

· Can these restrictions/requirements be challenged under WTO principles?

· Assuming China has made market access commitments under GATS, how might
these restrictions be justified?

à No measure less restrictive that China can employ?

à Go to the WTO to look for arbitrage

à US will take the case to WTO against China

à China will use Article XX to defend themselves

A state/ province are not competent to band a international product only the constitution
might do that.

à That is actually discrimination

TRIPS: Trademarks will protect the artwork, packages, recipes might protect the product
itself and TRIPS makes a WTO condition that will protect the trademarks of the product
internationally.
 Sanctions and Embargos

Being able to identify risk and mitigate them

à Compliance program:

à Identify negligence, corruption and breaking tort law

· Sanctions: Cartier being sanctioned by the US government for selling $250,000 in

jewelry to a black listed corrupt person. (Laundering Money)

- They had to pay a $5 million sanction for doing business with that person

- The company involved might be in a sanctioning list

General Considerations

Embargos and sanctions can take a number of forms, but for the most relevant types of
sanctions for businesses are financial sanctions and trade sanctions.

Financial Sanctions: Limit access to funds or financial services by sanctioned individuals or

entities and can include measures such as:

- The seizing of bank accounts

- Freezing of assets

- Prohibitions on capital movement and provision of investment services,

loans and insurance services

Trade sanctions generally prohibits:

· Trade in a specific good or commodity (eg. Oli, timber, diamonds) or services

· Also includes arms embargos and export controls on dual-use items.

WE GOT OVERLAPING REGIMES THAT CAN CAUSE PROBLEMS WHEN EXPANDING
BUSINESS INTERNATIONALLY

· The moment you operate internationally you need to be aware of the sanctions

· The EU sanctioned the US because of the sanctions they have applied to Cuba

àOverlap is not perfect in terms of context between countries

Most common sanctions

· Export Control

· Financial Control

· The blacklist

EU consolidated List

Long lists of designated persons and entities

· These are persons and entities to whom, for example, certain products
should not be provided, or from whom payment should not be received,
whether directly or through a third party.

· In UK , for example there are currently around 2,700 individuals and

entities on the list, including UK incorporated companies.

As a business owner YOU must know your customers and suppliers (background check)

è Make sure you are not making business with a blacklisted person

è Must do a screening

è Sanctions can be seen as a opportunities for other countries

· Ex: Spanish investors building hotels in Cuba.

EU Trade Embargos

· Trade embargoes and enhanced export controls usually also apply to

countries which are the targets of sanctions.
 · Member State “Export Control” agencies are responsible for issuing
licenses to export controlled goods and for goods which, although not
generally controlled, may be caught by a country specific embargo.

· Note that export licenses do not necessarily allow products and services to
be supplied where suppliers have reasonable cause to suspect that a
designated person may be benefitting from the provision of the product or
service, even if that benefit is only indirect.

· Additional requirements to make certain notifications to Treasury, ( and in

some circumstances to obtain approvals) for the transfers of funds to and
from nationals of embargoed countries. ( i.e. Iranian nationals)

US Sanctions

· Financial Sanctions: The US has implemented financial sanctions against

countries, regimes, individuals, and companies:

· Comprehensive sanctions - often referred to as 'country wide sanctions'- are

in place against Iran, Syria, Sudan, Cuba, and North Korea.

· Specific individuals and companies that have been identified as connected

with those activities, or with terrorism or narcotics, are identified on the
'Specially Designated Nationals' (SDN) list maintained and published on
OFAC’s website.

à REMEMBER: If you use $$ for any business transactions in any other country
you are subject to US sanctions

Sanctions Scenarios

EXAM: Identify red flags for corruption, sanctions

By accident baby powder reach Sudan and J&J was sanctioned.

à Regimes do not allow for circumvent or understand ignorance about sanctions

- Do not get creative with finding a way out of sanctions

Mitigation for sanctions: Compliance programs, audit, know your customers

Conclusions

· Programs to ensure sanctions regime compliance should include:

· Customer and transaction due diligence and screening against applicable financial
sanctions target lists, including EU Consolidated List, the Iran List and OFAC’s SDN List;

· Assessing if equipment and products are on export control lists such as the UK's
Strategic Export Control List and ensuring that all necessary licences to export are
obtained;

· Checking if imported goods are in any way restricted;

· Maintaining a list of countries which are subject to wider embargoes and ensuring
that equipment, goods and services are not supplied to persons and entities in those
countries, including via a third party distributor or otherwise indirectly, unless an
exemption applies;

· Contractual controls, including sanctions exclusions and warranties;

· Training in policies and procedures;

· And regular monitoring of transactions and periodic audits of sanctions compliance.

à It’s not a unidirection thing

Regional Trade Agreement

International Trade Agreements offers a possibility for smaller companies to enter a country.

à means to actually do something

- EU countries can challenge other countries in court

Regional trade Agreements

Ø The ever-growing number of regional trade agreements and preferential trade

arrangements is a prominent feature of international trade.

In the WTO, regional trade agreements (RTAs) are defined as reciprocal trade
agreements between two or more partners. They include free trade agreements
and customs unions.Ø WTO maintains an excellent database on RTAs (notified
to WTO) RTA Database.

à Huge preliberation of these agreements

· The WTO also receives notifications from WTO members regarding preferential trade
arrangements (PTAs).

- unilateral trade preferences such as Generalized System of Preferences schemes

where developed countries grant preferential tariffs to imports from developing countries,

- Other non-reciprocal preferential schemes granted a waiver by the General Council.

Regionalism and Multilateralism

· Regional trade agreements (RTAs) have become increasingly prevalent since the
early 1990s.

· As of 1 February 2016, some 625 notifications of RTAs (counting goods, services and
accessions separately) had been received by the GATT/WTO.

· Of these, 419 were in force. These WTO figures correspond to 454 physical RTAs
(counting goods, services and accessions together), of which 267 are currently in force.
 · Is the Ukraine war the end of globalization?

Examples of regional trade

Among the best known are

● The European Union

● The European Free Trade Association (EFTA),
● The North American Free Trade Agreement (NAFTA),
● The Southern Common Market (MERCOSUR),
● The Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA), and

· The Common Market of Eastern and Southern Africa (COMESA)

Andean and Comedesa: Pacts that have an arbitrational court à people go to them to
challenge decisions made

TTP: Trans-Pacific Partnership

· RTA among twelve Pacific Rim countries signed on 4 February 2016 in Auckland,
New Zealand, (after seven years of negotiations). It has not yet entered into force.

· US considers TPP a companion agreement to the proposed Transatlantic Trade and

Investment Partnership (TTIP).

12 Signatories are:

Ø Brunei

Ø Chile

Ø New Zealand

Ø Singapore

Ø Australia

Ø Canada

Ø Japan

Ø Malaysia

Ø Mexico

Ø Peru
 Ø the United States

Ø Vietnam

Ø The TPP – nearly seven years in the making –described by the United States as a
so-called “next- generation” trade agreement.

Ø As a “next generation” agreement, it is a template for future trade negotiations.

Ø Builds on the core structure of WTO and existing US FTAs , but takes rules further
in a number of key areas:

Ø electronic commerce,

Ø intellectual property,

Ø state-owned enterprises (SOEs).

· "Comprehensive market access”. Reduction/removal of tariff and non-tariff

barriers across substantially all trade in goods and services (Trade in Goods,
Textiles and Apparel, Rules of Origin, Customs Administration and Trade
Facilitation, Sanitary and Phytosanitary Measures, Technical Barriers to
Trade, Trade Remedies, Investment, Cross-Border Trade in Services,
Financial Services),

· Regional approach to commitments. (Temporary Entry for Business

Persons, Government Procurement, Competition Policy, Intellectual
Property, Labour, Environment, Regulatory)

à Dealing with barriers that make making business complicated – not being able

to get employees visas for expanding into another country.

à Allows and encourage regional agreements to support local business.

à Illegal Agreements between competitors will get you prosecuted s in Europe but
that is not the situation in every country

· Addressing new trade challenges. Such as the development of the digital

economy, and the role of state-owned enterprises (Telecommunications,
Electronic Commerce, State-Owned Enterprises and Designated Monopolies)

· Inclusive trade. Specific commitments on development and trade capacity

building, (Small and Medium-Sized Enterprises)
 Ø TPP builds on WTO and prior FTAs but also breaks new ground by addressing
subjects that have not yet been covered in trade agreements:

● Electronic Commerce:

● Investment

● Services

TTIP: Transatlantic Trade and Investment Partnership

Ø The Transatlantic Trade and Investment Partnership (TTIP) is a proposed trade

agreement between the European Union and the United States, with the aim of
promoting trade and multilateral economic growth.

Ø The agreement is under ongoing negotiations and its main three broad areas are:

Ø market access;

Ø specific regulation; and

Ø broader rules and principles and modes of cooperation.

Ø The negotiations were planned to be finalized by the end of 2014, but will not be
finished until 2019 or 2020,

Proposed Contents

Market access

§ expected between 87.5% to 97% of all tariffs would be cut to zero.

§ market access for goods and services that aim to remove "custom duties on goods
and restrictions on services, gaining better access to public markets, and making
it easier to invest

Services
 § "a better climate for the development of trade and investment", particularly the
"liberalisation of investment and cooperation on e-commerce".

Industry-specific regulation

§ "Improved regulatory coherence and cooperation by dismantling unnecessary

regulatory barriers such as bureaucratic duplication of effort".

Broader rules and principles and modes of co-operation

§ "Improved cooperation when it comes to setting international standards".

( including Energy and raw materials, Trade and Sustainable Development /
Labour and Environment, Public procurement,, Intellectual property, Competition
policy, State-owned or subsidised companies , Small and medium-sized
enterprises (SMEs), Trade remedies: e.g., anti-dumping practices, Customs and
Trade Facilitation)

§ Financial Regulation. The EU is putting more pressure on the US to include

financial regulation on the talks. But US does not want to make any concessions
or roll back Dodd-Frank Act, (introduced to tighten bank regulations after the
2008 crisis).

§ Food Production. The use of growth promoters in food production has been a
highly contentious issue between the EU and U.S • US feed contains protein and
some antibiotics to increase growth and feed efficiency. • In the EU, against the
law and against the Code of Ethics for veterinarians, to give animals drugs for
non-therapeutic purposes.

§ DO controversy. For example, around 296 Italian products are on the EU's
protected status list of 1,100 foods, alongside delicacies including Parmesan,
Gorgonzola, Prosciutto and Pecorino and Cantuccini Toscani. France has 250
products on the list, Germany 98, and Britain 60.

à In order to call a product form somewhere it has to be made with 100% ingredients
from a specific place

§ Tariff Negotiations

Ø Second tariff offers now exchanged by both sides

Ø Tariff outcomes should be at least as ambitious as in the CETA agreement

(on the EU side) and the TPP agreement (on the US side)
 Ø Talking about eliminating agricultural tariffs

Ø Main action is around non-tariff measures (NTMs)

Ø Difference in Regulatory Approaches • US and EU share basic mandate

to achieve a high level of food safety and consumer protection..but
cultural, political and institutional differences result in different perceptions
of risk and thus different regulatory outcomes:

Ø Beef hormones

Ø US dairy standards (Grade A Pasteurised Milk Ordinance)

Ø EU pesticide regulations

Ø Antibiotics in animal feed • Cloning restrictions

CRITICISM OF TTIP INCLUDES:

1. Secrecy of the negotiations

à Regulations sneaking into their local legal system

2. Privacy protection ( Return of Anti-Counterfeiting Trade Agreement)

3. Fear of deregulation ( GMOs, Financial regulation)

à Fears of financial deregulation and modify food

4. Companies bullying governments with ISA

5. Corp restructuring/job loss
6. Fear of privatization of public services ( Health Services, etc)

EU and Canada

Generally

Ø unlike NAFTA, CETA opens up the government procurement market in Canada

and the EU.

Ø The EU deal includes bigger trade quotas for agricultural products and extensions
of drug patents in Canada.

Ø Covers services more broadly than NAFTA, including financial services,

 Ø Allows more labour mobility, including efforts to work on recognizing each other's
credentials for professionals such as engineers.

à Very impactful in terms of tariffs

Tariffs

Ø CETA eliminates duties on more than 98 per cent of Canadian tariff lines.

Ø All tariff lines on non-agricultural goods will be fully eliminated seven years after
entry into force. (three, five or seven years after implementation)

Ø Tariff Rate Quotas (TRQs), used to control the importation of supply managed
goods (ie dairy products) are allocated to qualified applicants and allow import at
a reduced duty rate.

Ø The EU has also agreed to make specific market access commitments for certain
Canadian goods, including shrimp, cod, common wheat as well as beef and pork
in the sixth year of the agreement

Ø CETA eliminates duties on more than 98 per cent of Canadian tariff lines.

Ø All tariff lines on non-agricultural goods will be fully eliminated seven years after
entry into force. (three, five or seven years after implementation)

Ø Tariff Rate Quotas (TRQs), used to control the importation of supply managed
goods (ie dairy products) are allocated to qualified applicants and allow import at
a reduced duty rate.

Ø The EU has also agreed to make specific market access commitments for certain
Canadian goods, including shrimp, cod, common wheat as well as beef and pork
in the sixth year of the agreement
TBT – Technical Barriers to Trade

- conformity assessment body in the EU can test EU products for export to the
Canadian market according to Canadian rules and vice versa.

- closer relations between the EU and Canada in the area of product regulations
e.g. EN and CAS. Both sides have agreed to recognise a conformity assessment
from the reciprocal body. Areas covered includes electrical, electronic and radio
equipment, toys, machinery, and measuring equipment.

SPS – Sanitary and Phytosanitary Rules

-Rationalized authorization procedures, re trade in animals and plant products.

-Integrated all existing Canada-EU Veterinary agreements regarding meat and meat
products.

-New processes to facilitate approval procedures of plants, fruit and vegetables

· If its good for EU standards should be good for Canada standards

What are the “rules of origin” that goods must meet to benefit from tariff reductions?

Originating goods under CETA are those goods that

(1) are wholly obtained in a party to the agreement,

(2) are produced exclusively from originating materials or

(3) have undergone “sufficient production” in a party, in accordance with certain

listed product-specific rules of origin.

Deminimis level set at 10 per cent of the transaction value or ex-works price of the product.

CETA allows limited quantities of certain products — agricultural products, fish and seafood,
textiles and apparel and vehicles — to qualify as originating under less demanding product-
specific rules of origin on a temporary basis.
**Rules of Origin: Where is something made

à if 50% of the product is made on a specific country its from that country

TRADE IN SERVICES

Ø CETA contains commitments to the national treatment and most-favoured nation

principles.

Ø The national treatment principle commits each party to treating the service
suppliers of the other party no less favourably than it treats its own service
suppliers, in like circumstances.

Ø Canada has taken a “negative list” approach to the liberalization of services under
CETA, in that all services are “covered services” unless specifically excluded.

INVESTOR STATE DISPUTE SETTLEMENT (ISDS)

CETA’s Investment Chapter creates a number of protections for covered investments of

investors from one CETA party in another CETA party.

Ø These include obligations to accord investors from another party:

- non-discriminatory treatment (including national treatment and most-favoured

nation provisions),

- the obligation to accord covered investments fair and equitable treatment

- full protection and security,

protections against direct and indirect expropriation without compensation.

· investment court” . Rather than submission of disputes to ad hoc tribunals (Appellate

Review- unlike NAFTA)

à If a company like BRAC wants to enter into Canada, but they are having issues because of
Canadian requirements they can take them to INVESTMENT COURT (and vice versa)

· consultation period of at least 180 days

· limited in scope to allegations (non-discriminatory treatment/investment protection)

(i.e., does not apply to market access).

IPR – Intellectual Property Rights

Ø closer co-operation between both sides against counterfeited trademarks, pirated

copyright goods and counterfeit geographical indication goods.

Ø strong focus on pharmaceuticals and protections and processes for appeals of

decisions.
Geographical Indications

Ø specific geographical regions will now benefit from the added protection re
geographical indications (GIs) of that region. These include:

Ø Grana Padano,

Ø Roquefort, Elia Kalamatas Olives

Ø Aceto balsamico di Modena

Ø Prosciutto di Parma