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Group 10 Midterm Report International Trade Law
Group 10 Midterm Report International Trade Law
Group 10 Midterm Report International Trade Law
FACULTY OF LAW
………***………
MIDTERM REPORT
THE NON-DISCRIMINATION
PRINCIPLES IN INTERNATIONAL
ECONOMIC LAW
INTRODUCTION........................................................................................................1
CHAPTER I: LITERATURE REVIEW OF THE NON-DISCRIMINATION
PRINCIPLES IN INTERNATIONAL ECONOMIC LAW.......................................2
1.1 Most-Favoured-Nation Treatment (MFN).........................................................2
1.1.1 MFN under GATT 1994.............................................................................2
1.1.2 MFN under the GATS................................................................................3
1.2 National Treatment (NT)...................................................................................4
1.2.1 NT under GATT 1994................................................................................4
1.2.2 NT under the GATS...................................................................................5
CHAPTER II: NATIONAL TREATMENT IN VIETNAM - JAPAN ECONOMIC
PARTNERSHIP AGREEMENT (VJEPA) AND UNITED STATES-MEXICO-
CANADA AGREEMENT (USMCA)..........................................................................7
2.1 National treatment under Article III:4/XX GATT and Article 14.4 USMCA....7
2.1.1 Comparison between Article III:4/XX GATT and Article 14.4 USMCA. . .7
2.1.2 Justification on public policy grounds........................................................9
2.2 National treatment under the GATS Article. XVIII and Article 8.11 EVFTA 11
2.2.1 Comparison between GATS Art. XVIII and Article 8.11 EVFTA............11
2.2.2 NT application of EVFTA........................................................................14
CONCLUSION...........................................................................................................18
REFERENCE.............................................................................................................19
The most-favored-nation and national treatment principles are central to GATT and
GATS. The objective of this essay is to critically investigate and evaluate the meaning
of these two WTO principles. The focus will then shift to a critical examination of
these two clauses which is related to the application of logistic industry, especially
their application in VJEPA and USMCA as we may discuss further in Chapter 2 of our
report. Before reaching a decision on the use of the WTO's GATT and GATS MNF
and NT requirements, the focus will shift to GATT and GATS case law of both WTO
panel and appellate bodies, provisions of international agreements, and scholarly
research. However, these principles of non-discrimination of the MFN and National
treatment differ in their application with respect to trade in goods and services,
although they are not exclusive in their application.
Not counting the introduction, conclusion, and references, the report consists of:
Chapter 1: Literature review of the Non-Discrimination principles in
International Economic Law
Chapter 2: National Treatment in Vietnam- Japan Economic Partnership
Agreement (VJEPA) and United States- Mexico- Canada Agreement
(USMCA)
Although free trade agreements (e.g., EVFTA, USMCA...) and GATT, GATS contain
provisions for MFN and NT, the concepts do not apply in the same way. As a result,
some modifications in all sectors may be required if the concept of trade liberalisation
in the aforementioned areas is to be realized.
We would like to express our profound gratitude to Ph.D. Vu Thi Kim Ngan for your
dedication and thoughtful instructions. Throughout our report- making process, we
tried our best to offer a high quality report. However, because of limited insights into
the application of MFN and NT, we inevitably made mistakes. We are looking forward
for your feedback, so that we can improve and provide more satisfying report in the
future.
2.1 National treatment under Article III:4/XX GATT and Article 14.4 USMCA
2.1.1 Comparison between Article III:4/XX GATT and Article 14.4 USMCA
❖ Article III GATT states that:
“1. The Contracting Parties recognize that […] laws, regulations and requirements
affecting the internal sale, offering for sale, purchase, transportation, distribution or use
of products, […] should not be applied to imported or domestic products so as to afford
protection to domestic production. […]”
“4. The products of the territory of any contracting party […] shall be accorded
treatment no less favourable than that accorded to like products of national origin in
respect of all laws, regulations and requirements affecting their internal sale, offering
for sale, purchase, transportation, distribution or use. […]”
❖ Similarly, Article 14.4 USMCA indicates that:
“1. Each Party shall accord to investors of another Party treatment no less favorable
than that it accords, in like circumstances, to its own investors with respect to the
establishment, acquisition, expansion, management, conduct, operation, and sale or
other disposition of investments in its territory.”
From two national treatment provisions above, the two important pillars of the
National treatment principle are nationality discrimination and public policy
justification. We will base on these pillars to distinguish between Articles III:4/XX
GATT and Article
14.4 USMCA. Nationality discrimination in USMCA and GATT case-law focuses on a
relatively structured analysis of the discriminatory/protectionist effect of the measure
under consideration involving such factors as: likeness, nationality imbalance and less
favourable treatment.
• Likeness
Regarding the analysis of nationality discrimination a determination of likeness has
mostly concentrated on the nature and extent of the competitive relationship between
products or investors, even though the definition of ‘likeness’ may have various roles in
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Most-Favoured-Nation and National Treatment are critical elements that comprise the
WTO's non-discrimination norm. The basic goal of these principles is to provide equal
opportunity to all World Trade Organization members. The essential provisions of
these principles are outlined in GATT and GATS.
The MFN and NT responsibilities are the two basic principles of non-discrimination in
WTO law. In layman's words, the MFN treatment obligation forbids a country from
discriminating amongst countries, whereas the national treatment obligation forbids a
country from discriminating against other countries. These non-discrimination rules
apply to both commerce in products and trade in services.
On the other hand, under NT obligation, if a state grants a particular right, benefit or
privilege to its own citizens, it must also grant those advantages to the citizens of other
states while they are in that country. In the context of international agreements, a state
must provide equal treatment to those citizens of other states that are participating in
the agreement. Furthermore, imports and locally-produced goods should be treated
equally, at least after the foreign goods have entered the market. However, while the
NT obligation is generally viewed as a desirable principle, in custom it equally may
mean that a state can deprive foreigners of anything of which it deprives its own
citizens. Moreover, NT only appears to apply once a product, service or item of
intellectual property has entered the market. Therefore, charging customs duty on an
import is not a violation of national treatment even if locally-produced products are not
charged an equivalent tax.
MFN and NT are designed to prevent discrimination against the imported products,
services or service suppliers. The two principles apply to trade in goods as well as
trade in services. Both principles should be applied ‘immediately and unconditionally’
to all other members of the WTO.
Whether positive or negative, Vietnam also needs to try and make great efforts to take
advantage of the opportunities from free trade agreements. The trade agreement is not
only a pressure but also a driving force for economic development.
Last but not least, we would like to thank Ph.D. Vu Kim Ngan for your dedication and
comprehensive directions, which have allowed us to better understand the teachings
and execute our report in the proper manner. Despite our efforts, our report had several
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