INTERNATIONAL TRADE LAW AND POLICY.

Ángela Yanguas Luque

JOHANNA JACOBSSON: jjacobsson@faculty.ie.edu
● 20% Class Participation
● 20% Assignments (2 group assignments 10% + 10%) (case + presentation)
● 30% Midterm exam (MQ + Case scenario)
● 30% Final exam (Case scenario + reflection question)

SESSION 1 & 2.
Introduction to the Governance of International Trade: History and Institutional Structure of the
Multilateral Trading System (WTO).

Introduction PTAs: Preferential Trade Agreements

● Most common ones → FTAs: Free Trade Areas (MERCOSUR, EU,
African Union…).

De-Globalization Are we witnessing a de-globalization?

In the past few years, and most recently in response to the economic havoc
caused by the COVID-19 pandemic and now by the new geo-economic reality,
advocacy and public support for economic self-sufficiency, reshoring of
manufacturing, and less reliance on international trade have notably increased.

Q: Have we entered an era where globalization is decreasing rather than

increasing? What problems or promises may come with that?

Whether the current period should be characterized as one of ‘slowbalisation’ or

‘deglobalisation’, or whether the digitisation of the economy has simply
transformed the manner how globalization works in the twenty-first century, we
are seemingly facing a new era for economic globalization.

Why trade? The governance of world trade through international agreements is based on
the economic theory of comparative advantage →
https://www.youtube.com/watch?v=ol4NexZ0iII&t=161s
https://www.youtube.com/watch?v=rv6Sq0fmclY

➔ The idea in a nutshell: Focus on your biggest advantages and sell them
to other countries → specialization
➔ The terms of trade (in economics, the ratio between a country's export
prices and its import prices) determine how successful a country is when
doing that. In policy language, the “terms of trade” refer to trade
protection measures negotiated between countries (tariffs and other
measures)

Economic theory suggests that total economic welfare in all countries is

improved when countries focus on those industries where they have the highest
expertise and success. In this scenario, restrictions on trade make all
consumers poorer than they otherwise would have been.

● But is free trade reality today?

● Why do countries not operate solely on the basis of comparative
advantage?

What are Countries aiming at?

Get the best product at the best prices, maximize welfare, liberalization of trade
- Comparative advantage by specialization

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Complete Trade Why is complete free trade not a reality?

1. Internal political constraints
○ Political groups, industries, lobbying
○ Ideological differences and protection

2. Concerns about economic self-sufficiency, food safety and

medicine security
○ As demonstrated by the pandemic and the current re-evaluation
of global supply chain
○ E.g. reshoring (semiconductors), EU’s “strategic autonomy”

3. Values and concerns

○ Preservation of cultural and religious values, people and animal
health, public security)
○ As we see during this course, some of these reasons are more in
line with the WTO rules than others.
○ Climate change, sustainability, environmental values

Arguments to restrict trade

Governments have multiple, often overlapping, reasons for restricting trade.
Governments take trade-restrictive measures for example:
1. to protect a domestic industry and jobs threatened by import competition
2. to assist the establishment of a new industry
3. to support a domestic industry to establish itself on the world market
4. to generate government revenue
5. to protect national security and ensure self-sufficiency
6. to protect and promote non-economic societal values and interests, such
as public morals, public health, a sustainable environment, human
rights, minimum labour standards, consumer safety, and cultural identity
and diversity

Economic Globalization Why is economic globalization incomplete?

Trade protection (tariffs, quotas and non-tariff barriers) -> to protect national
industries, to generate government revenue or to protect national security or
other national values

In addition to trade protection, there are other reasons why economic

globalization is not complete
● Large divergences in prices persist even with increased competition
○ Differences in transport costs, taxes and in the efficiency of
distribution networks (the Ricardo model of comparative
advantage is of course a vast simplification - it is built on two
products (cloth and wine) and two countries (Portugal and
Britain) only and assumes constant costs and constant prices).
● Furthermore, while goods, services and capital move across borders
with greater ease, restrictions on the free movement of workers, i.e.
restrictions on economic migration, remain multiple and rigorous
○ International trade agreements do not generally cover migration

The means to exercise Tariffs

trade protection ● A tax or duty to be paid on a particular class of imports (or exports)
● Allowed under WTO law but only up to the level included in a WTO
member’s tariff schedule (-> the so-called “bound tariffs”), exceptions
apply (reaction to dumping or subsidies + possibility to apply temporary
“safeguards”)

Quotas

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● A limited quantity of a particular product which under official controls can

be imported or exported
● Quotas are generally prohibited under WTO law (exceptions apply)

Non-tariff measures
● Various regulatory standards and regulations
● Licenses, restricted distribution channels, administrative processes (red
tape)
● Import controls, state aid and subsidies, as well as public procurement
and localisation policies and capital controls
● Harder to measure but today the most important form of protectionism
(such non-tariff barriers can be either legitimate or less legitimate)

Legal framework International trade: probably the most important part of economic
globalization, is governed by international law → International trade law
Why have countries decided to create rules for trade?
● Legal certainty: as compared to autonomous liberalization
● Predictability particularly for business operations
● Common benefit → “I follow the rules if I can expect you to follow them
too” (amplified by the creation of WTO)
● Possibility to solve disputes and retaliate in a controlled manner

Most typical

● Tariffs
○ Customs duties: Are allowed
○ Taxes, protective INTERNAL taxes (VAT or IVA)
■ Not allow to discriminate in taxes local and foreign products
○ Convenient way to raise revenue from the population
○ Infant industry protection

● Quotas
○ Sanction (trade embargos)

● Standards
○ International regulations

● National Security
○ Trump's argument
○ US wrongly invoking national security

“CHIPS” Taiwán

CBAM: Carbon Border Adjustment Mechanism - European Commission

● EU Emissions Trading System (EU ETS)
○ Additional Customs duty, if they don't have the same environmental standards
○ Affects the environment competition
○ Is not yet challenged in front of the WTO

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SESSION 3
Rationale for Trade Protection

Multilateral trading Where did it begin? When and by whom? In what context?
system
● The Bretton Woods system of monetary management established the
rules for commercial and financial relations among the United States,
Canada, Western European countries, Australia, and Japan after the
1944 Bretton Woods Agreement
● Setting up a system of rules, institutions, and procedures to regulate the
international monetary system, these accords established the IMF and
the International Bank for Reconstruction and Development (IBRD),
which today is part of the World Bank Group
○ 44 countries set up a system where they agreed to peg their
currencies to the U.S. dollar, thus providing for a system of fixed
exchange rates until the early 1970s (the end of the
arrangement)
● In Bretton Woods was born also the idea for a international trade
organization (“ITO”), but the negotiations were carried out later in
1945-1947 (however, the charter for ITO was never ratified – instead the
United States, the United Kingdom, Canada, Australia, France, Belgium,
the Netherlands, and Luxembourg concluded the GATT Agreement in
1947 -> later brought under the WTO in 1995)

https://www.youtube.com/watch?v=-6bVeDab6UA ()
https://www.youtube.com/watch?v=lN3qrFA4jXc ()

Where did it begin? When and by whom? In what context?

● Similar system that is still working, since they are still appling that system
● Multiple case law from the court

Three legs: IMF, WORLD BANK, ITO

● ITO: it was not successful, the US did not ratify .
○ So they agreed to the GATT agreement
○ Just one agreement until they created the WTO in 1995
● They US congress started reading the statute, since they were subscribing to a very restrict
economy.
○ Since the US did not ratify, the other countries did not ratify either.

Bretton Woods System

IMF: Economic policy reform, helping countries having problem with money
WB: Borrowing from the markets, economic development
WTO: promote global trade, and a court for countries that did not follow the agreement

WTO WTO – the multilateral avenue for setting the rules of trade
World Trade Organization → Why multiralteral

WTO was born in 1995 but countries have to come together to agree on
progressive trade liberalization already since 1947
● Under the framework of the General Agreement on Trade and Tariffs
(GATT)

Since 1995, the WTO covers multilateral agreements also on services

WHAT IS WTO?
WTO 5 top functions (WTO Agreement Art III)
1. Administers trade agreements
2. Provides a forum for multilateral trade organizations
3. Administers the dispute settlement

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4. Monitors national trade policies

5. Cooperates with the IMF and the WB

GATT GATT Trade Rounds

ITO → GATT → WTO

Session 4.
You can not say just to remove the tariff for oranges for X country, but you have to remove the trade tariff for
all. You have to remove at least 90% of the tariff (EU removed 100% of the tariffs between them)
● All this WTO have to respect it, but no one challenge it, since they don’t know if they themselves
respect it.

SESSION 4
Rationale for Trade Protection

KEY AGREEMENTS Trading goods:

● GATT (+SPs+TBT agreements)
● Special agreements (e.g. agriculture
Trade in services:
● GATS
IP rights:
● TRIPS

Who runs the WTO Run by its member governments.

●

Organizational The highest body → The WTO Ministerial Conference

Structure of the WTO
Day-to-day work in between the ministerial conferences is handled by three
bodies:
1. The General Council

WTO membership 164 members, 98% of world trade, WTO a universal organization
● 3/4 of the WTO Members consider themselves developing countries (the
status of “developing country …”

The overall average length of accession negotiations is then years and two
months:
● A result of hard bargaining on the par of WTO Members or Political
factors.
● But it is also a result of the tardy supply of infromastion by the applicant

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and the slow pace at which it make the necessary amendments to

WTO dispute settlement The WTO dispute settlement system is generally considered to be one of the
major results of the Uruguay Round (which established the WTO) – “a cr

Panels → since 1947 (since GATT)

● Is similar to an arbitration case
● Spanish coffee

WTO AB (Appellate Body) → introduced in 1995 by the WTO, in the Uruguay negotiations, it would be useful
to have an appeal tribunal.
● We should have a permanent tribunal
● Appeal court, so have more law experts
● To provide coherence and harmonize the decisions
● It's a fast procedure, they just look at the points of law
● So many cases were taken to the AB
● US rejects the adjudication of new Judges (because of China)
● Then the full judicial body of the WTO is not working

Retaliation: Art. 22(2)

DSU

UK pone un tariff the 5% to the US oranges cuando debería ser 2%

US goes to the panel and the arbitration court les da la razón
UK debe arreglar el problema
Si no lo hace, US puede subir los tariffs a UK en algún otro producto para compensar el daño

KEY LEGAL …
PRINCIPLES of
GATT/ WTO
1) Most-favored nation principle (MFN)
2) National treatment (NT) principle

Q: What do these two principles mean?

1) Most-favored nation principle (MFN)

Article I: General Most-Favored-Nation Treatment
Advantage, favor, privilege or immunity
● Foreign vs foreign
● Whatever is made easier to someone (some country)
● You will have to extend it to other WTO members

2) National treatment (NT) principle

Article III*: National Treatment on Internal Taxation and Regulation
● Once the product has enter into the country
● Foreign vs domestic product
● No disadvantage of domestic vs foreign

SPANISH COFFEE CASE

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PARTIES:
● Spain
● Bazil

PRODUCT
● Coffee
● Most Spain' s imports of unroasted coffee from Brazil by "unwashed Arabica",

FACTS:
● Brazil initiated the dispute
● BRAZILIAN Unwashed Arabica and
● COLOMBIA + Other countries Mild coffee
● Spain claims that they are not like products

FIRST: consider if they are “like products”

All should be considered mind coffee

Property, nature, quality, tariff classification,

SESSION 5
MFN principle (cont.) and National treatment Principle

MFN & NT principles MFN → No dicrimitantion bet

NT principles

MFN principle The Most Favored Nation (MFN) principle

What is the principle in essence? What are the origins? Why is it a cornerstone
of world trade law
● MFN treatment has been a central pillar of trade policy for centuries.
It can be traced back to the twelfth century, although the phrase seems
to have first appeared in the seventeenth century.
● MFN treaty clauses spread with the growth of commerce in the fifteen
and sixteenth centuries. The US included an MFN clause in its first
treaty, a 1778 thrift with France on Amity and Commerce.
● In the 1800s and 1900s the MFN clause was included frequently in
various treaties, particularly in the Friendship, Commerce, and
Navigation treaty.
● MFN treatment was made one of the core obligations of commercial
policy of the Havana…

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Bilateral MFN clause origin

1778: France-US → agree on something between them.
Noone wants discrimination

Condition for
- You can choose your favorite partners, but you have to liveralized it from all countries
- E.g. EU no barriers
- MFN principle is not always very clear
- Room for some kind of agreements

The free trade agreement tariffs should not always above the WTO rules, keep the same policy.
● But, economics changes,
● Formally you don’t change things
● What are the consequences of being preferential with some countries
○ Consequences: they become more competitive

TRADE DIVERSION:
● E.g. oranges
ORANGES

COUNTRY A COUNTRY B

PRICE 5.3€ 5€

10% TARIFF 5.3€ 5.5€

Add of a new country Country C → 4.7€

after trade agreement - But no agreement, thus, 10% tariff
between A and B - That is 5.17 artificially less efficient

Article I GATT – MFN

principle

To the enabling clause, you can give more “help” or facilities to tray for developing countries.
● But you have to be be open to be open to also facilitate it to same countries fulfilling the conditions

RELEVANT ISSUES
MFN principle

The MFN principle is still very important.

● The 3 biggest countries don't have a FTA agreement
● EU, US, China
● Protectionist views in the US would not want it.
● TTIP fail trade between the US and the EU

They are so equal between power if they have so equal economic power

“Likeness” of products The competitive relationship between the products is compared → are we
comparing products that are similar enough?

● Used

Substitutes (but not perfect substitutes)

● Same products, you have two kinds of juices, would you mind changing?
● Serve the same objective “end use”

HS → international agreement for the tariffs classification

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● 190 members
● Most of the countries go into the same

With the WTO they don’t have to follow this HS, but they cannot be LIKE products.
● Is a case by case analysis

The spanish coffee case

Spanish constitution 1778

- Case in 1779, just after Franco

Before it was a state monopoly

- 3 types of coffee: Superior, Regular and Popular,

New tariffs

SPANISH Arguments:
- Concern about inflation
- Spanish ppl usually use mild coffee, then they are interested in maintaining the coffee price
- Effects on the country of origins: many countries produce multiple types of coffee, and therefore, they
are affected in just some part of the market. It is not done based on country discrimination, but on
Spain needs

Why was Spain in the position to raise those tariffs?

- Originally no tariff, and they internally inflate the price, it was created by internal decision the price
- From no tariffs to a 7% tariff on some coffees
- Spain does not say anything, any promise regarding tariffs for coffee, therefore, they could put a tariff

Problem: if you really would want to impose that tariff, you have to put it to everyone. If you put it restricting
to someone, you have to treat all the same “like” products the same.

KEY LEARNING OF THE Issues of like products

CASE ● You can divide products from the same “group”
● But you cannot impose different tariffs to “like products”

Spain has not committed to specific tariffs but they have to apply the same rule
to all the same “like” products.

→ MFN principle is being violated

FORMULA
1. VIOLATION → Brazil claims that MFN article I has being violated
2. LIKE PRODUCTS → yes, they are like products.
a. Spain tries to make an argument saying they are not like product
b. Panel claim they DO are like products
3. JUSTIFICATION →
a. Spain tries to find an exception for their case. Inflation / liberalize coffee sector
b. Countries can divide coffee types, but not if they are like products

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POSSIBLE SUCCESSFUL EXCEPTIONS: sustainability, public health,

QUESTIONS on Can the US impose a 10% custom duty (CD) on cars, while imposing a 30% on
customs duties and motorbikes?
“like products” 1. VIOLATION: potential MFN violation if they treat different
2. LIKE PRODUCTS: are cars and motorbikes the same product?
a. If the end use is similar.
b. In a substitutable car
3. JUSTIFICATION:
a. If “like product” need to find an exception

Can the US impose a 10% CD on small cars, while imposing a 30% CD on big
cars?
1. VIOLATION: MFN principle
2. LIKE PRODUCTS:
a. If consider like products
3. JUSTIFICATION:
a. They consume more fuel, they need more contamination
b. By placing a higher …
c. Article XX

Can Germany impose a 30% CD on nuts imported from the US while imposing
no CD whatsoever on nuts imported from Spain?
1. VIOLATON: free trade exception. EU free trade area exception, no need
to extend it to the US, so theres a free trade exception (marry countries)
2. LIKE PRODUCTS
3. JUSTIFICATION

Direct discrimination De Facto discrimination

Both, direct and indirect discrimination are no allowed under the MFN principle,
except for the exceptions that can be apply to the discrimination

CAN INTERNAL MEASURES ALSO BE A BARRIER TO TRADE?

Yes

Try to unify standards → the biggest barriers to trade are the internal measures

Most significant barriers → internal regulation and taxation

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SESSION 7
IMF principle

Japan – Alcoholic PARTIES:

beverages II case - Complainants: Canada, US, EU communities
- Respondents: Japan

AGREEMENT: GATT Art. III (national treatment)

1. VIOLATION:
a. National treatment (NT) principle → YES

2. LIKE PRODUCTS:
a. If consider like products
b. Shochu and vodka were like

3. JUSTIFICATION:
a.

Excise tax: An excise tax is an indirect tax charged by the government on the
sale of a particular good or service.

WHAT IS THE PROBLEM:

1) Measure: tax
2) Difference: in the level of the tax → based on the origin
a) NT principle discrimination
3) Like product
a) Shochu and vodka were like products.
b) Article III:2 → like products
c) GATT panel to establish which are the like products
d) What really are like products: characteristics, end use, level of
alcohol, classification, etc.
e) But the fact that other treat them as the same, is a way of
proving the decision is right. But it was based on the
characteristics
4) Directly competitive or substitutable
a) WTO Panel that Shochu was directly competitive with or
substitutable for ‘the other products subject to dispute’
b) They are substitutable: survey if they would be willing to buy
another alcohol
5)

Arguments claimants says

- They are in disadvantage

Protection of the domestic product

AIM AND EFFECT TEST:

- Why did the
- AIM not that relevant but about the effect

WHAT IS THE DIFFERENCE BETWEEN LIKE PRODUCTS AND

SUBSTITUTABLE PRODUCTS

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SESSION 8
National Treatment Principle (cont. Art.III:4 GATT)

General Exceptions → Art. XX GATT – Korea Beef case

● Continues next time: for next time see two more cases. Choose at least one of them and prepare it
for our next session: Brazil-Tyres and EC-Asbestos (both are cases on General Exceptions)

1st GROUP ASSIGNMENT: will be posited soon. Deadline: Friday 16 February

● Send an email
● Recommendation: footnotes

LAST CLASS REVIEW LIKE PRODUCTS: similar needs and physical characteristics
● If they are already like products →
○ Apply in excess?

Art III:1, 2, 4 → relevant paragraphs

- Any taxes shall not be subject to internal taxes or other internal charges
of any kind in excess of those applied to like domestic products.

Art III:2 → Japan Beverages case

● Like products: similar needs and physical characteristics
○ Any kind of tax apply to excess to foreign products is di
● DCS products: does not have to be exactly “like products”
○ You have to demonstrate it that is “to afford protection”
○ Appellation body says that you have to demonstrate how that tax
plays in reality
■ It is hitting really on foreign products?
■ Yes

* ADDITIONAL DOC: interpretative notes on Art. III GATT

● Paragraph 2
● 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 one hand, the taxed product and, on
the other hand, a directly competitive or substitutable product which was not similarly
taxed.

Article III:2 MEASURES:

● Internal taxes or other internal charges

Taxes just one type of border

● The rest under the paragraph 4

Article III:4 MEASURES:

● Laws, regulations and requirements affecting their internal sale, offering
for sale, purchase, transportation, distribution or use.
● → Anything that treats foreign products less favorable than national
products
○ Except taxes on charges
● ONLY if they are like products this art. applies.
○ What would mean to add also DCS products and not only like
products:
○ Art.4 affects all kinds of products. If you include a very wide
types of products (that is also DCS products). Is a very far
requirement that does not let competition, and no country would
accepted it.
○ Mutual recognition principle → accept the products as they are in
other countries, that is the EU, but NOT the WTO.

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KOREAN BEEF CASE DBS = Dispute Settlement Body

Dual retail system → confining sales of imported beef to specialized store

FINDINGS AND CONCLUSIONS

● upholds the Panel's ultimate conclusion that Korea's dual retail system
for beef is inconsistent with Article III:4 of the GATT 1994;
● upholds the Panel's conclusion that Korea's dual retail system for beef is
not justified under Article XX(d) of the GATT 1994; and
● finds it unnecessary to pass upon separately whether the ancillary sign
requirement is consistent with Article III:4 or justified under Article XX(d)
of the GATT 1994.

Article XX → General Exceptions

Article XX(d) of the GATT 1994;

STEPS Korean Case EXAMINATION OF THE EXCEPTIONS:

STEPS:
1. State what is the possible principle that is violated (MFN, NT, subsidy,
anti dumplings, etc. )
a. NT → Art.III:4
b. MEASURE: why it goes under this art.IV → Korea limited the
places where the korean beef can be sold
2. Whether if they are like products (+DSC → Art.III:2, ss)
3. Exceptions: if they are look for the possible justification
a. Look for the general exceptions Art.XX of the GATT
b. We only go to exceptions if have establish a violation

Korean invoke fraud

- How to analyze it.
- Korea had a national law that was in accordance with WTO agreements

Exceptions Art.XX of the GATT

- Go with the objective
- And is “necessary”

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SESSION 9
IMF principle

General exceptions Is there something in the list that you can use as a justification.
● E.g. GATT article XX General Exceptions (d)
● Korea → (d) to avoid a situation in which foreign meet is sell as
domestic meet, that is why you have to separate the place of

Steps
1. Violation → Art.III:4 GATT
2. Like products?
(Justification → )
3. General exception under Art.XX → Art.XX:d
4. Necessity test → Review the proportionality. The contribution to the objective.
STEPS necessity test
a. Contributed to the goal (appropriate to reach that goal that we want to reach)
b. Balance the different interests (societal of preventing fraud and international trade)
c. Is there any other less restrictive forms/means of achieving this goal
5. Chapeau → Art.XX:1. (If they pass the necessity test)
a. Cannot be arbitrary discrimination
b. Bonna Fide → you are really doing it in good faith and is necessary and not with second
intentions.

Necessity test… → according to the Korea beef case

… is to see whether another means exists which is less restrictive than the one used and which can reach the
objective sought. Whether such means will be applied consistently to other products or not is not a matter of
concern for the necessity requirement under Article XX(d).
KOREA:
- It is not fulfilled by Korea
- Other sectors more important than are also concern of fraud, they took other kind of measures
- Therefore, is not really necessary, since there are other less restrictive measures → LOST case

Other exceptions under the GATT agreement

Art.XXI →
Safeguards exceptions

Case: US-Shrimp 1998
● India, Malaysia, Pakistan and Thailand requested consultations with the
US concerning a ban on importation of shrimp and shrimp products.
● The nam was imposed for the protection of sea turtles
● Countries that had any of the endangered species of the sea tutles
within their jurisdiction, and harcested shrimp with mechanical means,
had to impose on their fishermen requirements comparable to those
borne by US shrimper if they wanted to be certifies to export shrimp
products to the US. Essentially this meant the use of turtle excluder
devices TEDs at all time
● An alleged violation of the Art.I (MNF) and Art.XI (elimination of quotas
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→ because it blocked imports to the country)

● The AB made clear that under the WTO rules, countries have the right to
take trade action to protect the environment (in particular …
● The US provided countries
● …

(Class notes)
Consultation: requirement under WTO → under the DSU
- Before you put a legal formal request under the court

Justified under Exception GATT Art.XX:d

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

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SESSION 10
IMF principle

The Brazil-Retreaded https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds332sum_

Tyres Case e.pdf

Steps – Brazil-Retreaded
1. Violation: Article XI:1 GATT. (Article XI*: General Elimination of Quantitative Restrictions)
2. Justification: Article XX:b
​(b) necessary to protect human, animal or plant life or health;
3. Necessity test: for the protection of human health
a. Does this measure contribute to the protection of human health? YES, we can also take into
consideration future impacts (tires not correctly.
b. Less restrictive policy → The appellate body said that you have to look to Brazil at this point.
There are, but any alternative would lead to technical difficulties, therefore, not feasible.
4. Chapeau
a. No discrimination, no nasty things going on, consistency of the measure.
b. European Communities demonstrated, that MERCOSUR countries had more advantages
than the others.
c. Not even between he MERCOSUR countries was homogeneous. → Therefore, more an
arbitrary cooperation

NECESSITY TEST = PROPORTIONALITY TEST (EU law)

EC – Asbestos https://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds135sum_
e.pdf

Steps

Precise and concrete.

1. Violation Art:III → NT
2. Like products → NOT even like product, no need to go further

EU CBAM

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SESSION 11
National Security

Justiciability Once you use national security.

- It's not up to the court to decide if it is correct or not to invoke national
security
- Self-judging (US we should judge ourselves what is or is not national
security)

Russia - Traffic in Transit case

DS512: Russia — Measures Concerning Traffic in Transit

Invoking national security by Russia, is a way of admitting that there was an open conflict (war) with Ukraine.
- Art.XXI:b:iii → accepted national security, since there was “taken in a time of war or other emergency
in international relations”

Good faith

DS552: United States — Certain Measures on Steel and Aluminium Products

● Recreate the connection to war

● GATT litigation

Distant connection in National Security is not a good argument

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 INTERNATIONAL TRADE LAW AND POLICY. Ángela Yanguas Luque

SESSION 12
The TBT and SPS agreement

Going beyond Non discrimination is the standard→ in Article III GATT

discrimination
What do these two agreements ask for? (the idea)
● Prevent countries for creating measures, to have an efficient way of
trading, in an Harmonization way

TBT and SPS harmonization:

● Where does this harmonization come from:
● They are Lex Specialis
○ Is the type of rule that comes within the ambit of one of them.
○ Some parts might go under the GATT, others under the TBT to
the SPS.

SPS Agreement The WTO’s SPS Agreement

People, animal and plant life.

The RATIONALE: 1995

- The more sophisticated the system, the more difficult it is to defend fair
competition.
- Therefore, There are created some other agreements to push a bit
further the requirements asked to the Countries of the WTO

Article 2 and Article 5 of the SPS

A three-tier test to find a violation under the SPS agreement

1. The measure discriminate between members
2. Discrimination is arbitrary or unjustifiable
3. Identical or similar conditions prevail in the territory of the members
concerned (justify discrimination in differences of the country of coming
of the products)

International standards In both agreements, if there is a International Standard, the countries are
strongly recommended to use them and adopt them, and therefore is a way of
compliance with the WTO
- The countries are not obliged to adopt that international standards, if
they go beyond those standards they will have to justify the why.

EC-Hormone Beef case There is actually a scientific reason to block imports.

The EU was not able to justify the import ban with the scientific assessment.
Because of the risk assessment. Not a serious enough study. Therefore, they
lost the

SPS 5.7 → 15 months (up to the arbitration measure)

- Both the AP and the Arbitration can define this time (15 month)

TPT agreement Encourage the use of international standards, same, can go further than the
International Standard, but under justification

Article 2 TPT → does no include a list of general exceptions like the GATT does
- Is an open list of exception, but they hay to be legitimate
- Is more strict, really be ready to explain why you did go further, but since
the list is not closed, is more likely to be prosper if its not discriminatory

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 INTERNATIONAL TRADE LAW AND POLICY. Ángela Yanguas Luque

Field of application

Technical regulations:
Standards: the physical characteristics of the products
How is going to be produced

You cannot discriminate, but why are you really asking for this specific measure.

The check of the compliance, do you trust the authorities of the other countries
to check the conformities,

EC-Seals case DS400: European Communities — Measures Prohibiting the Importation and
Marketing of Seal Products

Panel TBT applies

AP GATT applies
- The EU violated MFN and NT
- EU justify for public morals
- BUT the EU does not apply with the Chapeau because is not consistent
the why of apply the measure

Which agreement VIDEO

applies?

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 INTERNATIONAL TRADE LAW AND POLICY. Ángela Yanguas Luque

SESSION 13
TRIPS – Trade-Related Aspects of Intellectual Property Rights.

Introduction The TRIPS Agreement (1994)

Connection with international trade → WIPO (organization)

● TRIPS substantive standards of protection: copyright, trademarks,
Geographical indications, Industrial designs Patents, Layout-designs of
integrated circuits, Protection of undisclosed information, Control of
anti-competitive practices in contractual licenses

Tries to create a harmonize agreement (like the SPS and TPT)

Rules comes from:

● The Agreement sets these standards by requiring, first, that the
substantive obligations of the main conventions of the WIPO,
● the Paris Convention for the Protection of Industrial Property (Paris
Convention) and
● The Berne Convention for the Protection of Literary and Artistic Works
(Berne Convention) in their most recent versions, must be complied
with.

Covered rights Copyrights: Harry Potter

Trademarks: iPhone

Geographical indicators: champagne

Patents: covid-19 vaccines

(Minimum cover)

Agreement There are not LIKE PRODUCTS

- Nationals of the WTO members are protected

1) Litigation in National Courts

2) WTO litigation

To get into WTO litigation, they need to convince their government to start the
WTO litigation, since they are losing money, or serious damage to the country.

STEPS 1) Consultations
2) Panel (if complainant wants)
3) Appeal to the Appellate Body

IP dispute

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 INTERNATIONAL TRADE LAW AND POLICY. Ángela Yanguas Luque

SESSION 14
REVISE SESSION

Article III:4 NT principle

- No sense to do the same health checks if the problem is in sea salmon,
local lake salmon does not have that problem.

Also MFN principle → always at play,

- Foreign imports of lake salmon
- Also imports of lake salmon, therefore, also imports on lake salmon for
MNF

Necessity test:
- Mainly for Art. XX for general exceptions → just for the ones that have
the words necessity
- Proportionality test = necessity test (more or less, includes a careful
analysis)
- SPS goes a bit further

SPS and TBT → LEX SPECIALIS → if this specific issue is contemplated on

either of the two agreements, the specific agreement applies. If it does not
contemplate that issue, it goes under Article XX.
- BUT, can go under the scope of both GATT and SPS or TBT
- The angle of SPS and TBT compared to GATT is different

Similar to the Korean beef case. Art. III:4 → and then article XX:d (prevetion)

Certify seller not a standard under the TBT.

TBT: applies: technical regulation

- PPMs – the way see turtles were caught
- Relation to the current characteristics of the product or production
methods
- Properties of the product

If there is an specific international standard for jamon iberico, then China should
use the standard that as a base to their country regulation.
- You can go further, but you have to justify why and that it is not
discriminatory
- Preferable to use the international standard for Harmonization

(How you should sell it in the market does NOT apply)

If there are current standards,

General Exception of the NT

-

Shrimp case Violation art. XI GATT

1. US why you are doing this?
2. Burden of proof goes to the US
3. US is not for being discrimination, but to be carefil to protect sea turtles
4. But US see the exception go the XX:g
5. Burden of proof to the Malasians to proof that this exception applies,
they

CONSISTENT AND NOT DISCRIMINATORY WAY

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 INTERNATIONAL TRADE LAW AND POLICY. Ángela Yanguas Luque

GATT Legitimate objective close → article XX and XXI and XI (just for the provision of
quotas article XI)
- Close list
- General exceptions → apply to all the articles of the GATT

SPS Three tiers test – to see if there was a violation

- If there is a way of violation

Legitimate objective close→ health protection

TBT Article 2.2 → technical regulations

Legitimate objective open → Open list of justifications

Like, direct competition or perfect substituitables

Paragraph 2. First sentence, paragraph 2, 3, and 4
-

Chapeau Make sure that what you are invoking with the article

- Hidden discrimination and unjustifiable

- Aim at giving protection to the domestic
- Measure that are not consistent

Korean beef → fail in the necessity (too far)

Chapeau → not apply consistently among all (Brazil Tyres case, not all
countries in the same way)
- For health reasons → e.g. prohibiting sider and not beer
- JUSTIFICABLE E.g. sider: young people could tend to consume more
sider since is more sweet
- BUT, NOT JUSTIFIABLE → if you have s strong beer industry in the
country, and you prohibit sider just to protect the domestic product.
-

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