Exercise Bossche pp.

398-400:

Associate with Brazilian law firm Nogueira Neto Avogados

Contract with Superbrew Inc. Non-discrimination related to the following measures:

1) Ad valorem duties:
a) Exemption for high alcohol beer produced in the US: Clear violation of GATT art. I if this
is not extended to other countries.
b) Distinction between wine, low alcohol beer and high alcohol beer: Whether there is a
violation of GATT art. I depends on whether the distinction is in accordance with Newland’s
Schedule of Concessions. If there is no distinction between the products in the Schedule,
Newland may not be allowed to treat the products differently if the products are to be
regarded as “like products”. This may be discussed on the basis of the relevant factors and
case law.
c) Exemption for beer produced in micro-breweries: Whether there is a violation of GATT art.
I depends on
i) whether high-alcohol beer from such breweries can legitimately be distinguished
from such beer produced in other breweries,
ii) whether it can be argued that such a distinction does not imply a differential
treatment to products so that products from certain origins get preferential treatment (it
is highly questionable whether it may be possible to invoke this under art. I).

2) Import requirement concerning designated ports: Exemption for beer from Nearland:
Should this exemption be extended to all other countries? Explicit discrimination under GATT
art. I.
i) Possible justification of neighbouring countries? No!
ii) Non-application due to not yet a member? Yes!
(iii) Exemption according to art. XXIV:3(a)? Yes?)

3) Internal taxes
a) Explicit discrimination, MFN (USA): clearly in violation of GATT art. I
b) Explicit discrimination, NT: clearly in violation of GATT art. III:2
c) Implicit discrimination, NT: violation of GATT art. III:2?
i) Issue of like products or directly competitive products: wine, low alcohol beer, high
alcohol beer: as above to be discussed on the basis of relevant factors and case law.
Remark Japan – alcoholic beverages! Narrow interpretation of like products in first
sentence! Good example of contextual interpretation!!
ii) De minimis argument (15 vs. 15,5 %). Difference between the first and second
alternative in art. III:2 plus note! Both “similarly taxed” and “so as to afford
protection” under the second alternative!

4) Sales requirements NB: Must be error in the exercise!!!

a) Explicit discrimination in favour of Australian beer: clearly in violation of GATT art. I (cf.
art. III:4)
b) Implicit discrimination in favour of wine: violation of GATT art. III:4 depends on whether
wine and beer can be considered as “like products”. The differential treatment is significant.

5) Right of establishment of sales distribution

a) Establishment of wholesale trade company:
 GATS art. XVII: Covered by Schedule, but with reservation concerning ownership in
relation to “commercial presence”: Consequence: does only have a right of
establishment if Superbrew can find or establish a partner in Newland that is willing to
own 30 % of the company.
b) Establishment of network of retail shops:
Not covered by Schedule: No obligation of national treatment under GATS.

6) Minimum price requirement:

Implicit discrimination covered by GATT art. III:4? It is a measure that would “affect sale”.
Does it amount to “less favourable treatment”? This is questionable and cannot be resolved
unless it can be showed that the minimum price is likely to favour domestic producers.
Richland will have the burden of proof in this context.

7) Regulation of use of additives:

Distinction between low and high alcohol beer:
a) Implicit discrimination under GATT art. III:4?
i) Is low and high alcohol beer like products?
ii) Is the regulation likely to imply less favourable treatment in violation of art. III:4?
The question of effects of the differential treatment!
b) Implicit discrimination under TBT art. 2.1: the same standard as under GATT art. III:4?
Yes.

8) National Federation of Restaurateurs instruction to not serve beer:

Implicit discrimination under GATT art. III:4?
i) Can the act be classified as “requirement”? It may be mandatory for the members of
the NFR, but we have no indication that membership of the NFR is mandatory. Neither
do we have indications that Newland has decisive authority over NFR. These issues
will have to be clarified, as well as the significance of the government support to NFR.
ii) The issue of “state trading enterprise”, art. XVII

9) Prohibition of the sale of beer during week-ends in certain municipalities:

Implicit discrimination under GATT art. III:4
i) Is the government responsible for acts of municipalities? Clearly yes!
ii) Does art. XXIV:12 offer a possibility of flexibility? Only in very exceptional cases!
iii) Is beer and wine “like products” in this context?
iv) Does the prohibition imply less favourable treatment? Yes!

10) Law requiring armed forces to by domestic alcohol:

Explicit discrimination.
i) Falls within the scope of GATT art. III:4, and is in apparent violation.
ii) Covered by the exemption in art. III:8(a)? Is it “products purchased for
governmental purposes”? Depends on whether the beer is bought for resale or not. It
probably is, at least in part. Must be examined!

11) Use of engineers:

a) Explicit MFN discrimination under GATS art. II? Yes. (see also specification of “less
favourable treatment” in art. XVII:3!)
b) Explicit NT discrimination under GATS art. XVII?
i) Covered by Schedule? Yes
ii) Unlawful under art. XVII? Yes!