THE UNIVERSITY OF THE WEST INDIES

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1 THE UNIVERSITY OF THE WEST INDIES EXAMINATIONS OF January 2007 CODE AND NAME OF COURSE: LAW6330 Advanced Public International Trade Law DATE AND TIME: DURATION: 3 HOURS INSTRUCTIONS TO CANDIDATES: This paper has 6 pages and 10 questions. Answer any FOUR Questions 1. Discuss critically the function of the exhaustion of local remedies rule, in relation to the rights of states and their nationals doing business abroad. 2. Is it fair to consider WTO law as falling behind modern trends in public international law by not allowing standing to individuals or companies in disputes which engage their business interests? 3. Evaluate the contribution of the WTO system to the development of international law of dispute settlement in relation to: appellate jurisdiction; remedies; and enforcement of decisions. ii... TT..:vn~.~ity..F H.o Woad- Imii g lc

2 Page 2 4. Write a brief explanation of any four of the following aspects of WTO law: the identification of the text of GATT 1994; (d) (e) (f) the aspects of WTO law connoted by "unfair trade", and the differences between them; the distinction between "as such" challenges and "as applied" challenges; the distinction between defacto compliance and de jure compliance; (actionable) non-violation; and the distinction between consensus and "reverse(d)" consensus. 5. Discuss the significance of the reasoning of the Appellate Body in European Communities - Regime for the Importation, Sale and Distribution of Bananas WT/DS27/AB/R 9 September 1997 in relation to: (d) the question of the mutual exclusiveness of trade in goods and trade in services; the question of the locus standi in dispute settlement of a WTO member with no trading interest in the subject-matter of the dispute; the competence of the WTO dispute settlement system to interpret non-wto agreements; the right of a WTO member to use legal representation in WTO dispute settlement. 6. Answer either or. How far does WTO law accommodate international environmental law? Explain how the case-law on GATS has dealt with: (i) (ii) the identification of service sectors; and the concept of a "zero quota". The University of the West Indies

3 7. "[T]he WTO Agreement is knot] intended to dictate the type of tax system that should be maintained by a [WTO] Member" (from the Panel Report in US - Tax Treatment For "Foreign Sales Corporations" WT/DS108). Is this statement a reasonable generalization of WTO law as applied in that case, in Mexico - Tax Measures on Soft Drinks and Other Beverages WT/DS308 and in U.S. - Continued Dumping and Subsidy Offset Act of 2000 (the Byrd Amendment case WT/DS217)? You may substitute any other relevant WTO case (however identified) for any of those specified, provided that at least three case illustrations are supplied. 8. How is either or both of the CSME regime or the draft FTAA regime to be accommodated with the principles of WTO law governing most favoured nation treatment; and the manner of settling disputes? 9. Xhangkiania, Richthofenia, the Newsamarkand Empire and the Bactrian Islands are WTO member states. Xhangkiania's GATS Schedules, effective 1 February 2007, include the following features: Xhangkiania makes specific commitments in the "hotel and other lodging services" (HOLS) sub-sector, but makes no other commitments under "trade services; hotel and restaurant services". The sector and sub-sector categories used in the Xhangkianian schedule are identified as those of the United Nations CPC Provisional classification, which does not include restaurant services under HOLS. Under mode 3 for the HOLS sub-sector, the market access column of the Xhangkiania Schedule states: "Xhangkiania reserves the right not to permit establishment of commercial presence by non-xhangkianian service providers before January 2009", and also "The provisions of the Foreign Services Regulation Act are applicable". The national treatment column of the Schedule under that mode for that sub-sector states "None, except as in the market access column." Under mode 4 for the HOLS sub-sector, the market access column of the Xhangkiania Schedule states: "where commercial presence is permitted, a foreign service provider establishing such presence may employ in that connection non-xhangkianians up to a maximum of 50 per cent of the work force without those workers being subject to work permit requirements, and visits from managerial level staff based outside of Xhangkiania are permitted in that connection without restriction".

4 Page 4 The national treatment column of the Schedule under that mode for that sub-sector states "Unbound, except as in the market access column." The Foreign Services Regulation Act inter alia requires all non-xhangkianian owned and operated hotels to apply for a business licence and a hotel licence, and authorizes the Minister of Trade to impose quotas based on market requirements on the issue of hotel licenses (in the case of Xhangkianian owned hotels, a business licence is all that is required by other law); prohibits the operation of restaurants by non-xhangkianian operators or in buildings owned by non-xhangkianians; requires the grant of a business licence to any hotel, whether Xhangkianian owned or operated or not, on application and payment of a uniform fixed fee. Richthofenians require visas for entry to Xhangkiania for any purpose. Newsamarkandians do not require visas for entry to Xhangkiania except for purposes which require a work permit. On February , new legislation in Xhangkiania sets January 2008 as the earliest date at which hotels may be owned and operated by non-xhangkianians. In March 2007, a Richthofenian hotelier applies for and is granted the licences to operate a hotel in Xhangkiania with effect from January 2008, although the application had requested a starting date in June 2007, the beginning of the Xhangkianian tourist season. The Richthofenian hotelier's preliminary analysis demonstrates that the level of room occupancy at the hotel is likely to be 30 per cent less than it would be if the hotel included a restaurant, as do the existing Xhanglanian hotels. Also in March 2007, a Newsamarkand hotelier applies for and is granted the licences to operate a hotel in Xhangkiania with effect from January The Newsamarkand hotelier's business model contemplates an accommodation-only hotel, located within proximity of areas with a sufficiency of restaurants. Again in March 2007, new Xhangkianian legislation requires work permits for all Xhangkiania-based employees of non-xhangkianian service providers, and stipulates that such work permits will only be granted where no non-xhangkianians have relevant qualifications. In April 2007, a Bactrian Islands hotelier is refused a licence to operate a hotel in Xhangkiania on the grounds that hotel capacity is already projected to be excessive for the Xhangkianian tourism market.

5 Page 5 In March 2008, the entire hotel industry in Xhangkiania suffers an outbreak of industrial action which regularly occurs in three-year cycles. The Newsamarkand hotelier is able to send Newsamarkand-based human resources managers to resolve the problem in two days. Because the Richthofenian hotelier has to wait two weeks for the Richthofenia based human resources managers' visa applications to be processed, the situation at the Richthofenian hotelier's hotel gets out of control, and the cost of restoring normal conditions at that hotel is much greater than that incurred by the Newsamarkand hotelier. In April 2008, the Richthofenian hotelier is denied work permits for three bellmen whom the hotelier wishes to employ in the Xhangkiania hotel. In May 2008 the Richthofenia and Bactrian Islands hoteliers complain to their Ministers of Trade that Xhangkiania is in breach of its WTO obligations. Advise the Richthofenian and Bactrian Ministers of Trade. 10. Answer,, and (d) below on the assumption that the Rappard Islands ("The Rappards"), the Dunkelian Federation (Dunkelia"), Hudecia, Windwhitestan and Longland are WTO members. The Rappards agreed with Dunkelia in the pre-wto era a voluntary export restraint programme (VER) whereby Dunkelia places quantitative restrictions (QRs) on its export of red beans to The Rappards, which QRs The Rappards requested to protect the Rappardian red beans growers from price competition. Dunkelia continues, with the enthusiastic support of The Rappards, to act in accordance with that agreement. Rappardian duties actually levied on imported red beans are at the level at which the tariffs are bound under The Rappards' GATT schedules. Hudecia importers customarily buy processed red peas from The Rappards, and are concerned that their import prices do not benefit from the lowered prices which would apply but for the VER. Dunkelian fanners are willing to supply Hudecia with unprocessed red beans, but neither Dunkelia nor Hudecia has production facilities for processing red beans, and Hudecia has no market for unprocessed red beans. Advise the Minister of Trade of Hudecia, who has received complaints from the red beans importers. The Rappards allocates ten million United States dollars to an export credit guarantee (ECG) programme it establishes for its rice farmers, which by law will cease to be available once agreement has been reached in WTO negotiations on disciplines for ECG programmes. Dunkelia is unable to offer similar facilities to its rice exporters, who must pay the full commercial cost of such guarantees. The result is that their export prices for rice cannot compete with those of Rappardian exporters in the market in Windwhitestan, the world's largest consumer of rice.

6 Page 6 Prior to the creation of the ECG programme, The Rappards' agricultural subsidies in all relevant categories were already at the point where there was no leeway under the Agreement on Agriculture to increase the level of such subsidies, and the demand for such subsidies as were already in place was sufficiently strong as to rule out, in political terms, proposals for their abolition. Advise the Minister of State of Dunkelia, who has received complaints from the rice farmers. Facts applicable to both and (d): The Rappards' Restaurant Operators' Association (RROA), a voluntary association representing the majority of the restaurateurs in The Rappards, operates a self-regulatory "Restaurant Services Industy Code" (RRSIC) which requires that fruit served in restaurants claiming the description "gourmet" must, "without discrimination as to its place of origin", have been harvested not earlier than 48 hours prior to serving. The rule has no health protection or fruit species conservation basis. One practical effect of this provision is to price Dunkelian bananas out of much of the upscale restaurant market on account of the cumulative effect of the Rappardian tariffs and the cost of air freight. Longland, however, is in sufficiently close proximity to the nearest Rappardian island that Longland bananas are still able to compete with Rappardian bananas in the relevant niche of the Rappardian restaurant trade, since Longland's efficient banana cultivation methods compensate for the effect of the Rappardian tariffs. The Rappards has made no GATS commitments related to restaurant services, but permits ownership of restaurants by non-rappardians within a quota. Dunkelian restaurateurs find themselves at a competitive disadvantage with Longland restaurateurs in using this facility, since they cannot, given the 48-hour rule, operate "gourmet" restaurants with the prestige attached to RROA membership and with, at the same time, the commercial advantage of using Dunkelian fruit from suppliers with whom they have dose business relationships. The Government of The Rappards has received complaints from Dunkelia that the RRSIC is a violation of Rappadia's WTO obligations and has, on the other hand, also been asked by RROA to give legislative effect to the RRSIC. Dunkelia has disclaimed any intention to rely on either or both of the SPS or TBT Agreements in order to make its case. (d) Advise the Government of The Rappards on the WTO trade in goods issues arising from the above situation. Advise the Government of The Rappards on the WTO trade in services issues arising from the above situation. END OF PAPER. TheUniversity of the West Indies