INT L TRADE LAW BASIC GATT PILLARS IV CONT D. Prof David K. Linnan USC LAW # 665 Unit Nine

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1 INT L TRADE LAW BASIC GATT PILLARS IV CONT D Prof David K. Linnan USC LAW # 665 Unit Nine

2 GATT PILLARS RECALL THE FOUR PILLARS Idea of four pillars within GATT/WTO system: 1. Most Favored Nations [four weeks ago] 2. National Treatment [three weeks ago] 3. Trade Liberalization (negotiated tariff reductions in trade rounds) [two week, customs law] 4. Non-Tariff Barriers & Fair Trade [more this week] CONSIDER WTO VIDEO AS PRINCIPLES ACROSS DIFFERENT AGREEMENTS, IDEA ALMOST OF CONSTITUTIONAL PRINCIPLES

3 DEFINITIONS AGAIN NTBs + 1. What is a tariff? Where have we seen it before? 2. What is a non-tariff barrier, and why are they not the same creature in GATT/WTO eyes? 3. What is fair trade opposed to, unfair trade or something else? Why?

4 GATT ARTICLE X LOOK AT ARTICLES X, RE TRANSPARENCY PARA. 1 Laws, regulations, judicial decisions and administrative rulings of general application, made effective by any contracting party, pertaining to the classification or the valuation of products for customs purposes, or to rates of duty, taxes or other charges, or to requirements, restrictions or prohibitions on imports or exports or on the transfer of payments therefor, or affecting their sale, distribution, transportation, insurance, warehousing inspection, exhibition, processing, mixing or other use, shall be published promptly in such a manner as to enable governments and traders to become acquainted with them. [What is picture of markets seemingly behind transparency?]

5 QUOTA ANALYSIS ANALYSIS OF 1980s STEEL IN US VERSUS KRAKATOA STEEL 1. What happened in 1980s steel proceedings in US, and what were the direct and indirect effects projected for protection of the steel industry? How was this analyzed by CBO and other parties? 2. Is the analysis comparable for Indonesian circumstances, and what has happened with Krakatoa Steel (SOE/BUMN)? ULTIMATELY, WHAT IS THE PICTURE OF SOEs/BUMNs IN GATT/WTO, AND IS IT CONSISTENT WITH PICTURE OF MARKETS?

6 MANAGED TRADE (1) ISSUES OF MANAGED AND FAIR TRADE PARTICULARLY BETWEEN US & JAPAN IN 1980s-90s (SEMI-CONDUCTORS & CARS) 1. Factual background of 1980s disputes re semi-conductors, cars and failures to sell in exporters home markets (so-called structural impediments initiative). 2. Why could GM not sell cars in Japan, claims pro and contra? Why not IBM selling chips? UNDERLYING ISSUES OF WHETHER AND HOW TO ACHIEVE FAIR TRADE, WHAT IS IT?

7 MANAGED TRADE (2) ISSUES OF MANAGED AND FAIR TRADE PARTICULARLY BETWEEN US & JAPAN IN 1980s-90s (SEMI-CONDUCTORS & CARS) CONT D 3. Why did third parties like Europeans care about disputes between US & Japanese about how Japanese industry behaved in Japan? 4. How to treat the idea of administrative guidance versus strict regulation? UNDERLYING ISSUES OF WHETHER AND HOW TO ACHIEVE FAIR TRADE, WHAT IS IT?

8 MANAGED TRADE (3) ISSUES OF MANAGED AND FAIR TRADE PARTICULARLY BETWEEN US & JAPAN IN 1980s-90s (SEMI-CONDUCTORS & CARS) CONT D 5. Does managed trade require binding govt action, and what does it mean to have voluntary export restraints (outlawed under 1994 WTO treaty) 6. What is the picture of markets and the economy under the negotiated undertakings with Japan (see Consumers Union v. Kissinger)? UNDERLYING ISSUES OF WHETHER AND HOW TO ACHIEVE FAIR TRADE, WHAT IS IT?

9 TBTs I TECHNICAL BARRIERS TO TRADE AS IMPEDIMENTS/POSSIBLE NTBs 1. Concept of traditional NTB as with French VCR customs reg specifying Poiters for import only 2. TBTs as subcategory of standards as technical matter (DIN, IT hardware & software as with DVD players, Underwriters Laboratory, GS, ISO, wall sockets & voltage), protectionist?

10 TBTs II TECHNICAL BARRIERS TO TRADE AS IMPEDIMENTS/POSSIBLE NTBs (CONT D) 3. Does it matter whether the standards body is int l, governmental or private sector? 4. Mutual recognition vs harmonization vs formal international standard

11 TBT & P-SANITARY WHAT KINDS OF STANDARDS CAN THERE BE & HOW DO THEY DIFFER 1. TBT as generic, covered under 1994 TBT Agreement a. Viewed more as standardization w/ collateral effects problem, mfn & least trade restrictive 2. Phyto-Sanitary with own 1994 S P-Sanitary Agreement a. Note tie into GATT art XX(b) exception ( [exceptions for measures] necessary to protect human, animal or plant life or health ) b. Note SPS Agmt art 2 requirement of scientific basis & risk calculation i. Hormone beef & GMO issues UNDERLYING ISSUES OF BALANCING DOMESTIC REGS AGAINST TRADE EFFECTS

12 NEXT WEEK BAHALA CHAPTER 10 ON GATT ART XX EXCEPTIONS PAGES , CHAPTER 17 SAFEGUARD ACTIONS PAGES , UNDERLYING ISSUES OF WHAT ARE GENERIC PERMITTED EXCEPTIONS, ESSENTIALLY RECOGNIZING COMPETING INTERESTS? BUT, MORE IMPORTANTLY IN PRACTICAL TERMS, WHAT IS NOT RECOGNIZED?

13 FOR INDON STUDENTS COURSE PAGE AT dex.htm READING ASSIGNMENTS IN BOOK, POSTED ON COURSE MATERIALS LINK WITH PARALLEL DOC CITES

14 FOR INDON STUDENTS YOU MUST SIGN UP FOR LISTSERV laws665 (INSTRUCTIONS AT CLASS ADMINISTRATION LINK ON COURSE PAGE), SEE tm Plus collect s in Jakarta (via Ibu Ratna) INDONESIANS HAVE JOINED US & NOW PROJECTS

15 DOHA ROUND NOW PROJECTS FOLLOWING MINISTERIAL DECLARATIONS Doha Ministerial Declaration (2001) 01_e/mindecl_e.htm Doha explanation (keyed to areas) & work program xplained_e.htm Assign areas to both sides, plus NAFTA & AFTA (pick out RTAs, Agriculture, Services, Investment, Govt Procurement, TRIPs, dispute resolution, AD & CVD)