UNIVERSITY OF ECONOMICS AND LAW

FACILITY OF ECONOMIC LAW

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INTERNATIONAL TRADE LAW

ASSESSMENT 3
Student name: Đoàn Minh Hoàng
Student ID: K214020080
Class section: 222LU0207
Lecturer: Dr. Đào Gia Phúc
I. National Treatment
ISSUE: Whether Averna violates the national treatment obligations when applying
the new regulation (‘traffic light’ labeling)?
RULES: Article III.4 GATT 1994.
APPLICATION:
1. Whether the measure at issue is a law, regulation or requirement covered by
Article III.4?
In this scenario, Averna implemented fresh rules requiring cars to be labeled as
'Traffic light'. It seems that Averna introduced a labeling policy indicating that petrol
and diesel cars should bear a red label indicating 'High Carbon Emissions'. This move
reflects Averna's growing concern for the environment. While the new regulation by
Averna does not apply to imported cars from Qumar to Averna, it significantly
impacts the sales of cars imported from Qumar. Consequently, this matter falls within
the purview of Article III.4 of the General Agreement on Tariffs and Trade (GATT)
1994.
2. Whether the imported (Petrol and Diesel Cars) and domestic products
(hybrid-cars) are ‘like products’?
i) The characteristics, nature, and quality of the products differ. Hybrid cars, for
instance, employ both internal combustion engines and electric motors, whereas
Fastcar automobiles solely rely on internal combustion engines.
ii) Both types of vehicles serve the purpose of transportation and commuting.
iii) Despite Qumar cars being more popular in Averna, hybrid and electric vehicles
serve as excellent alternatives when gasoline and diesel cars are unavailable.
Consequently, these two options fiercely compete in the market.
iv) The classification of tariffs is identical for cars originating from Qumar and
Averna. Therefore, the imported and domestic products are considered as "like
products."
3. The imported products are accorded less favorable treatment?
In spite of the fact that all vehicles produced by Fast Cars are carbon neutral and
certified by the Verus Carbon Neutral Seal, which assesses carbon emissions from the
beginning to the end of the product's life cycle, Fast Cars is unhappy with Averna's
policy that allows Letabian cars to be labeled as "Low Carbon Emissions" solely
based on the producers' self-declaration of meeting Averna's maximum carbon
emissions standards. As a result, the imported cars are being treated less favorably.
CONCLUSION: In conclusion, this issue violates Article III.4 of the GATT 1994.

II. Most - favored - nation Treatment

a) The GATT 1994
ISSUE: Whether Averna violates the Article I.1 of the GATT 1994 because of the
discrimination between Qumar and Letabia?
RULES: Article I.1 of the GATT 1994.
APPLICATION:
1. Whether the Averna at issue is a measure covered by Article I:1?
It is easy to see that the law imposed in Averna affects ‘the internal sale’ when
applying the red ‘High Carbon Emissions’ to Fast Cars products because people in
Averna are highly conscious about environmental problems, hence, this matter is
covered by Article I.1.
2. Whether the Averna’s measure grants an ‘advantage’?
Indeed, Averna permits cars from Letabia, a former colony of Averna, to be labeled as
'Low Carbon Emissions' despite the fact that their producers only provide a self-
declaration of compliance with Averna's maximum carbon emissions standards. The
term 'refers to any advantage granted by a Member to any like product from or for
another country' applies in this case. Specifically, this creates an advantage for
Letabia, even though Fastcars from Qumar possess a more legitimate certification
from the Verus Carbon Neutral Seal. Consequently, Averna has implemented a
discriminatory policy that favors car products from Letabia and creates an unfair
advantage for them.
3. Whether the products from Qumar and Letabia concerned are ‘like
products’?
i) The characteristics, nature, and quality of the products differ. Hybrid cars, for
instance, employ both internal combustion engines and electric motors, whereas
Fastcar automobiles solely rely on internal combustion engines.
ii) Both types of vehicles serve the purpose of transportation and commuting.
iii) Despite Qumar cars being more popular in Averna, hybrid and electric vehicles
serve as excellent alternatives when gasoline and diesel cars are unavailable.
Consequently, these two options fiercely compete in the market.
iv) The classification of tariffs is identical for cars originating from Qumar and
Averna. Therefore, the imported and domestic products are considered as "like
products."
4. Whether the advantage at issue is accorded ‘immediately and unconditionally’
to all like products concerned, irrespective of their origin or destination?
As per Article I.1 of the GATT 1994, the fourth element to be taken into account is
the advantage granted in a manner that is "immediate and unconditional." In the
current scenario, Averna introduced a labeling regulation for cars imported from
Qumar, but it was not implemented "immediately and unconditionally" for Letabian
cars. Additionally, Averna's labeling regulation concerning Qumar has negative
implications for Qumar's trade and business. This clearly amounts to discriminatory
treatment between Qumar and Letabia.
CONCLUSION: To summarize, Averna's action of affixing a red label on cars
imported from Qumar while allowing Letabian cars to be labeled green solely based
on the producers' self-declaration is a violation of Article I.1 of the GATT 1994.
b) The TBT agreement
ISSUE: Whether Averna violates the Article 2.1 of TBT agreement because of the
discrimination between Qumar and Letabia?
RULES: Article 2.1 of the TBT agreement.
APPLICATION:
1. Whether the measure at issue is a Technical regulation?
i) Apply on product(s): Averna implemented a fresh labeling system for carbon
emissions, where every new car is required to have a label indicating its level of
carbon emissions. Cars that emit carbon within the maximum threshold specified in
the Promotion of Sustainability Act can be marked with a green "Low Carbon
Emissions" label, while those exceeding the limit must be labeled with the red one.
ii) Relate to product’s characteristics: The domestic cars producers produce hybrid
or electric cars to meet the requirement of the new Act. Although the imports also
meet the requirements, those are petrol and diesel cars so they get the red tags.
iii) Mandatory: It’s compulsory for all new cars (both domestic and imported cars)
Therefore, the measure is a Technical regulation.
2. Whether the imported (Petrol and Diesel Cars) and domestic products
(hybrid-cars) are ‘like products’?
i) The products differ in their engines. For instance, hybrid cars utilize both internal
combustion engines and electric motors, while Fastcar automobiles solely rely on
internal combustion engines.
ii) Both types of vehicles serve the purpose of transportation and commuting.
iii) Despite cars from Qumar being more popular in Averna, hybrid and electric
vehicles are considered the best alternatives when gasoline and diesel vehicles are
unavailable. As a result, these two options fiercely compete in the market.
iv) The cars from Qumar and Averna share the same tariff classification. Therefore,
imported and domestic products are considered to be "like products."
3. The imported products are accorded no less favorable treatment than like
domestic products?
Even though all cars produced by Fast Cars are carbon neutral and hold a certificate
from the Verus Carbon Neutral Seal, which evaluates carbon emissions throughout the
entire lifespan of the product, Fastcar expresses discontent regarding Averna's practice
of allowing Letabian cars to be labeled as "Low Carbon Emissions" based on the
producers' self-declaration of compliance with Averna's maximum carbon emissions
standards. As a result, the imported cars are being subjected to less favorable
treatment.
CONCLUSION: To summarize, Averna's action of affixing a red label on cars
imported from Qumar while allowing Letabian cars to be labeled green solely based
on the producers' self-declaration violated Article 2.1 of the TBT (Technical Barriers
to Trade) agreement.
III. Article 2.2 of The TBT agreement
ISSUE: Whether Averna violates Article 2.2 of the TBT agreement when creating
obstacles to Qumar?
RULES: Article 2.2 of the TBT agreement
APPLICATION:
Whether the measure at issue is trade restrictive?
Totally yes, Averna enforced a new Act about labeling cars with red and green tags.
Although the cars from Qumar met all the requirements from Averna, they get the red
tags just because their cars use petrol and diesel. By contrast, the cars from Letabia are
not restricted even though their cars do not meet the requirements. This act is a trade
restriction to cars from Qumar.
Whether the measure at issue fulfills a legitimate objective?
Yes, In the context of Averna's increasing environmental awareness, the government
has enacted a new law to promote environmental protection in that country, and also
to encourage the production of electric vehicles in the country. developed country.
However, they used this new law to prevent the development of cars imported from
Qumar.
Whether the measure at issue is not more trade restrictive than necessary to
fulfill a legitimate objective?
The cars from Qumar are certified by the Verus Carbon Neutral Seal, more
particularly, the cars imported from Qumar qualified the Averna’s Act. Averna did not
specify the criteria for evaluating a vehicle, which is misleading because they do not
provide accurate information to consumers about the full climate impact of the vehicle
they purchase. Moreover, labeling a car as green and red will affect consumer
psychology, they only focus on buying a car with a blue label rather than a red label,
which negatively affects the cars labeled red even though those red cars don't really
have an impact on the environment as announced by the government. The measure at
issue is trade restrictive than necessary to fulfill a legitimate objective because they
only focus on getting their products or products from their former colonial country
green-labeled and supported by domestic consumers.
CONCLUSION: Averna violates the Article 2.2 of the TBT agreement when
restricting trade strictly from Qumar to actualize the legitimate objective but it
actually does not.

IV. Article 2.4 of the TBT agreement

ISSUE: Whether the new Act of Averna is consistent with Article 2.4 of the TBT
agreement?
RULE: Article 2.4 of the TBT agreement.
APPLICATION:
Whether there exists a relevant International standard?
An ISO (International Organization for Standardization) standard called ISO-14020
exists, which outlines general principles for environmental labels. This international
standard, approved by a two-thirds majority vote, categorizes labels into three types: I,
II, and III, based on the product's life cycle.
Whether the relevant international standard is used as a basis for the technical
regulation at issue?
There are no relevant international standards used in the Promotion of Sustainability
Act and the ISO-14020 is not an exception, it is just a domestic Act regulation.
Whether the relevant international standard is an effective and appropriate
means for the fulfillment of the legitimate objectives pursued?
The relevant worldwide standard must be a means for the fulfillment of the legitimate
objectives. Firstly, it was adopted by a two thirds majority vote and it’s clearly
demarcated into three labels. Secondly, it is an internationally recognized standard,
not a subjectively imposed standard like Averna that hinders trade between two
countries, affecting the national economy because the auto industry is growing
rapidly. accounts for a very large proportion of Qumar's revenue. Thirdly, a product
that is truly safe for the environment is not only judged by the time it is used, but also
by the end of its useful life. Therefore, ISO-14020 is an effective and suitable standard
for Averna to use in assessing whether a product is environmentally friendly or not.
CONCLUSION: In conclusion, Averna violates the Article 2.4 of the TBT agreement
because they do not apply any relevant international standard into their Act.

In general, when a country breaches the TBT agreement, it may also violate the GATT
1994, as there are situations where both the TBT agreement and the GATT 1994 are
applicable to a specific measure. In such cases, the panel must initially assess the
compliance with the TBT agreement. It is important to note that the TBT agreement
focuses on technical procedures, while the GATT 1994 addresses the treatment of
countries. Lastly, it is crucial to apply the TBT agreement and the GATT 1994
separately in different cases to ensure fairness and inclusivity.