ITL PPT Aw

International Trade Law
Desalegn D. Disassa
12/31/2021 Desalegn D. Disassa (LL.B, LL.M) 1

Course Outline
Dispute
Core Principle
Introduction TBT and SPS settlement
under GATT
under WTO
Contemporar Trade in Trade

TRIPS
y issue Services Remedies
Ethiopia
Accession to
WTO

Chapter I: Introduction
International Trade
 It is the exchange of goods and services between two or more
countries.
 Involve cross-border transaction and foreign currency
 Having bearing on BOP and domestic firm
 Why countries trade? Gain from trade. The gain includes
many/expand choice, low price, high quality, economy of scale,
competition and innovation, employment/job creation, large
market, strengthen ties b/n states, encourage and attract
investment, and satisfy needs. IT have also disadvantage-loss of
cultural identity, social welfare issues,

Economic Globalization
 Globalization is the closer integration of the countries and peoples of the world
which has been brought about by the enormous reduction of costs of
transportation and communication, and the breaking down of artificial barriers
to the flow of goods, services, capital, knowledge, and (to a lesser extent) people
across borders (Joseph Stiglitz)
 ‘Globalization’ is the inexorable integration of markets, nation-states and
technologies to a degree never witnessed before – in a way that is enabling
individuals, corporations and nation-states to reach around the world farther,
faster, deeper and cheaper than ever before, and in a way that is enabling the
world to reach into individuals, corporations and nation-states farther, faster,
deeper and cheaper than ever before (Thomas Friedman ).

Cont’d
 Economic globalization is the gradual integration of national economies
into one borderless global economy. It encompasses both (free)
international trade and (unrestricted) foreign direct investment (Peter Van
den Bossche).
 Such integration is brought by reduction of natural and artificial barriers to
flows of goods, services, capital, knowledge, and people across borders.
Movement of good, services, services supplier, labor, investor, and capital
(money) of across international fronters prove existence of EG.
 The two driving forces of EG are: (1) Technology which reduced
transaction costs (communication and transportation cost); (2)
Liberalization of foreign trade and investment which reduce artificial
barriers.

Cont’d
EG is not new phenomena
There are three periods of EG
1. The 1st path (1870-1914). Resulted from industrial revolution and
come to an end following break out WWI.
2. The 2nd path (1945-1980). Started with WWII and characterized
by rapid increase in international trade as a result of the
dismantling of the heavy trade protection that had been put in
place during Great Depression
3. The present path (since 1980) resulted from technological
advancement and continued reduction of artificial barriers. Faster,
deeper…further…cheaper!

Is that globalization is irreversible or not?
 ‘Globalization is not a policy choice, it is a fact.’ Bill Clinton.
Globalization ‘is not an unstoppable force of nature, but is shaped by
those who set the rules’. Lord Jordan
 Not irreversible, but very difficult to reverse (possible to shape) the
current globalization process because of:
1. Distribution channel created by new technology (satellite and
internet) and difficult to control;
2. Firm institutional basis (WTO) of liberal IT policies;
3. High costs of withdrawing from the global economy.
Has economic globalization stopped or lowered? What does trade share in
GDPs reveal?

Cont’d

EG a Blessing or Curse?
All around the world people feel the effects of economic
globalization and IT, but these effects are not felt by all in an even or
equitable way.
The demonstrations that rocked Seattle, Prague, Montreal,
Washington, Hong Kong, Geneva, Genoa, Zurich and other cities
around the world gave expression to many people's dissatisfaction
with, and rejection of, economic globalization and international
trade.
The issue whether economic globalization and international trade is
a curse or blessing is argumentative?

Cont’d
Curse: EG and IT have harmful effect on Blessing
1. Jobs and wages 1. Economic growth of export-lead
2. Global ecosystem & local environment by countries
promoting unsustainable patterns of
production and consumption 2. High life expectancy
3. World poverty and hunger by increasing 3. Improved standard of living.
income disparity
4. Reduced the sense of isolation felt in
4. Economic development of developing
countries by affecting domestic industry
much of the developing world
5. Social, labour, health and safety regulation 5. Access to knowledge
b/c of regulatory competition resulting in a 6. Consumer benefit (lower price, high
‘race to the bottom’
quality and more choice
6. Livelihood of hundreds of millions of small
farmers endangered by the importation of 7. Big market for producer and exporter.
cheap agricultural produce 8. Better understanding between nations
7. Cultural identity and diversity
9. New Opportunities
8. National sovereignty

Current IE Problem and Challenges
Slow growth and high unemployment
Trade protectionism
Excessive fluctuation and misalignment in exchange rates and financial crisis.
high spending and low saving,
High borrowing
Overvaluation of dollar
 Trade deficits
Deep poverty
Resource scarcity
Environmental degradation and climate change
Unsustainable development

Theory and Policy Debate of on IT (Free Trade Debate)
 Liberalization vis-à-vis Protectionism (autarky is absolute
restriction)
 Efficient allocation of resource vis-à-vis sovereignty
 Developing countries vis-à-vis developed countries
 Protectionism- tariffs, non-tariffs (quota, subsidy, QR)
Free Trade Liberalization Protectionism Autarky

Free or Restricted Trade?
The arguments for free trade
Specialization and efficiency
Provide lower price, more choice and high quality product for consumer
Economy of scale.
Create large and stable market
More production
Promotes a mutually profitable division of labor,
Enhances the potential real national product for all nations
Improve standards of living (income, health, school, life expectancy)
Strengthen competitiveness of domestic industry
Contribute to economic growth and poverty eradication

Cont’d
Reduce war (promote international peace and
stability) as cross-border contacts and exchange of
ideas contribute to better mutual understanding. In
other words, IT contribute to peaceful and
constructive international relations. It is often stated
that, ‘if goods do not cross frontiers, soldiers will’.
Create employment
Promote democracy

Cont’d
The Arguments for Restrictions on Trade (Protectionism):
Protection of domestic industry and jobs/employment (against job loss or low salary)
threatened by import competition.
Protection of infant industry. In other words, to assist the establishment of a new industry.
This have particular relevance to developing countries.
 Avoid risk of over-specialization. Risk of dependence over export sale of two or more product
which may affect the economy if change may happen in the world market.
To support a domestic industry to establish itself on the world market. This strategic trade
policy argument.
Strategic reason. Some industries need to be protected in order to use it at the time of crisis.
For example, agriculture, steel, electricity
Prevent dumping. Selling at a price lower than place of product or cost of production.
Protect product standard (safety, healthy and environment).
Protecting economy from lost cost labor. Lost cost happen when domestic industry compete
with foreign one by reducing salary.

Cont’d
Raise/generate government revenue.
Correct BOP deficit by reducing import expenditures.
Protect national security and ensure self-sufficiency.
Support a domestic industry to establish itself on the world market. To
establish economy of scale.
Protect and promote non-economic societal values and interests, such
as public morals, public health, a sustainable environment, human
rights, minimum labour standards, consumer safety, and cultural
identity and diversity. (Sometime, it is not only legitimate, but also
necessary, other time is a mere protection measure)
Just influenced by interest group pressures

Question
Why is it that according to most economists even
the poorest countries can, at least in theory,
benefit from international trade? Why do
governments resort to trade-restrictive
measures/protectionist policies? Which of the
arguments for trade and arguments for
restrictions on trade do you find most convincing?
Which arguments do you find least convincing?

Does IT benefit of All?
 IT have benefit, but not all sections of the population, have benefitted from it.
 Many people have been left behind by IT or are now–worse off than they were
before.
 So what to do to make IT benefit all?
1. Good governance at the national level(move toward better policies(tax,
competition), investment climate, social safety net, innovation, and governance);
2. A further reduction of trade barriers;
3. More development aid by developed for developing and LDC’s; and
4. Better international cooperation and global governance of economic
globalization and international trade.
5. Fair competition and multilateral trade rules and institution which create
equal playing filed. Otherwise, strongest take all.

Cont’d
Otherwise, it is likely to result in more income inequality, social
injustice, environmental degradation and cultural
homogenization.

Cont’d
To conclude, IT is necessary but not sufficient conditions for
economic development and prosperity. The simple spread of
markets will not eliminate poverty. A global economy and more IT
will not automatically lead to rising prosperity for all countries and
for all people. In fact, without the international and national action
referred to above, IT will not bring prosperity to all, but, on the
contrary, is likely to result in more income inequality, social
injustice, environmental degradation and cultural homogenization.
Can IT be of benefit to all countries, and, within countries, to all
sections of the population? If so, under what conditions? Are these
conditions currently fulfilled? If not, are they likely to be fulfilled in
the future?

Theories of International Trade
 IT theories Explain Basis, Gain and Pattern Trade
A. Mercantilism (17th and 18th C)
 The way for a nation to become rich and powerful was to export more than it
imported i.e. trade surplus.
 They measure wealth of nation by the stock of precious metal it possessed. A
country should export in order to receive such metal.
 One nation could get at the expense of another nation (trade is zero-sum game).
 So, it encourage export and discourage import. It advocated strict government
control of economic activity.
 Does the increase in protectionist policies adopted by countries to
restrict import amount resurgence of neo-mercantilism in the 21 st
century? Mercantilism, though declining, is alive and well in the twenty-
first century!

Cont’d
B. Absolute Cost Advantage Theory (Adam Smith)- a country should

produce and sell goods or services it produce at lower cost of production
(labor) than other countries.
Absolute advantage refers to the ability of country to produce more of a
good or service than competitors, using the same amount of resources.

Cont’d
Comparative Cost Advantage Theory (David Ricardo)- a country
should specialize in producing and exporting products in which it has a
comparative(relative production cost)advantage and it should import
goods in which it has a comparative (relative production
cost)disadvantage.
 Comparative advantage refers to the ability of a country to produce a
particular good or service at a lower opportunity cost than trading
partners.

Cont’d
B. Hecksher-Ohlin's theory of factor endowments stressed that a
country should produce and export goods that require resources
(factors) i.e. labor, land, capital that are abundant in the home
country. Leontief paradox in the U.S.
C. Product Life Cycle T-Theory Raymond Vernon's- stressed that a
company will begin to export its product and later take on FDI as the
product moves through its life cycle. Eventually a country's export
becomes its import.

The Bretton Woods System
 Refers International Economic Institution created at Bretton Wood
Conference (1944) to address economic reason of WWII.
 Based on liberalist view it have the plan to create three institutions
which administer monetary, development, and trade matters.
 IBRD (commonly world bank) and IMF were result of the conference.
However, the plan to create ITO fails because of US’s Senate opposition.
 As a result, GATT 1947 (provisional Agreement of trade in goods) serve
defacto ITO over 50 year up to 1995 (establishment of WTO).
 Currently the Bretton wood system include World Bank Groups (IBRD,
IDA, IFC, MIGA, ICSID), IMF, and WTO.

International Trade Law
Definition: ITL is a sub-set of public international law in general and IEL in
particular. IT Law is a complex set of rules dealing with trade in goods and
services and the protection of IPRs.
Source: Treaties (multilateral, regional or bilateral), custom, general principles
of law, decision of court or tribunal, writing of publicist as well as national law.
This course focus on WTO Agreements that make up what is commonly
referred to as the multilateral trading system.
Need: (1) To restrain trade-restrictive measures of countries; (2)To ensure
security and predictability traders need; (3) To protect and promote
important societal values and interests at international level; (4) To
achieve a greater measure of equity in international economic relations,
and (5) To ensure rule-based (not power based) global trading system

Cont’d
ITL is not a closed, self-contained system, isolated from the rest of
international law, but integral part of it. For example, Art. 3.2. of DSU
require panels and the Appellate Body to interpret the WTO agreements
according to the ‘customary rules of interpretation of public international
law.
What if there is contradiction between ITL and other international law?
Which prevail? Controversial!
Article XVI:4 of the WTO Agreement require conformity of national law,
regulations and practices with WTO Agreements. See also Art 27 of VCLT.

Concerns
1. Trade relations across borders –market access to trade
2. Domestic trade legislation at the inter-face of borders
3. Domestic legislation having bearing on international trade
Problems in Focus
4. Quantitative restrictions (e.g. quota and embargo)
5. Tariffs ( e.g. custom duties and other charges)
6. Non-tariff barriers (e.g. state trading, customs procedures)
7. Unfair trade practices (e.g. subsidies and dumping)
8. Trade related measures (e.g. intellectual property rights, investment protection)
9. Discriminatory practices (e.g. discrimination against or between foreign like
goods, services, services supplier)

GATT 1947 & 1994
 The first half of the twentieth century is characterized, as a time of high
tariffs, discriminatory economic arrangements, import quotas,
unilateralism and bilateralism- plus a global depression.
 This called for MFN and NT treatment, a prohibition of qualitative
restrictions, and a commitment to reduction of trade barriers and
opening of markets.
 Need for forum for negotiations and guardian of the rules.
 Agreement to create IMF and WB reached in Bretton wood conference
(1944). Trade was not directly on the agenda of the Bretton Woods
 Conference but the need for institution governing international trade
was recognized.

Cont’d
 Discussion between USA and UK commenced-GATT and ITO
negotiations (1946-48).
 GATT was conceived as a multilateral agreement for the
reduction of tariffs.
 GATT was opened for signature on October 30, 1947, and entered
into effect, provisionally/interim without need of parliamentary
approval on January 1, 1948.
 GATT 1947 LAST UPTON JAN 1995.
 Regulate only trade in goods.
 ITO was never formally rejected, but it faded away following failure
U.S to ratify ITO or Havana Charter. ITO first proposed by US.

GATT…
 Served as provisional agreement and de facto ITO.
 Served as auspices of 8 rounds of trade negotiations (Kendy-AD, Tokyo-
non-tariffs, Uruguay 1986-1994(last and comprehensives )
 Did great job in trade liberalization through reduction to tariff and non-
tariff barriers.
 GATT lack institutional foundation.
 Provide basic rules for multilateral trading system up to Jan 1, 1995 (WTO).
 Weak dispute settlement frameworks as it require positive consensus.
 Articles dealing with such matters as accession, joint action by the
Contracting Parties and consultations and complaints allowed it to
function effectively as an international organization.

Cont’d
Part I & III apply in full as from 1 January 1948.
Part II apply ‘to the fullest extent not inconsistent with existing
legislation’. This part contain most of the substantive provisions
which essentially dealt with non-tariff trade measures. Aka
“Grandfather Clause/rights“ or “Existing Legislation Exception”.
GATT 1947 was never adopted by the CONTRACTING PARTIES.
But, applied provisional per PPA till 1995.
Provided the structure for a global process of steady trade
liberalization through eight "rounds" of multilateral trade
negotiations sponsored by its Contracting Parties.

The GATT Trade Rounds
1. Geneva round (1947)-GATT, trade in goods
2. Annecy Round(1949) - modest tariff- cutting
3. Torquay Round (1950-1)-modest tariff- cutting
4. Geneva (1955-6)
5. Dillon Round-EEC was integrated into the GATT
without major friction. USA FEELING (ECONOMIC
AND POLOTICAL SIDE).Tariff reduction is modest.
6. Kennedy Round(1964-7)–produced very few results on
non-tariff barriers.

Cont’d
7. Tokyo Round(1973-9)- First negotiation on non-tariff barriers (NTBs).
Birth of plurilateral code (Anti-Dumping Code, Subsidies Code,
Government Procurement Code) bind only signatories. Establishment
of enabling clause.
8. Uruguay Round (1986-94)-Final Act Embodying the Results of the
Uruguay Round of Multilateral Trade Negotiations" ("the Final
Act") which contain Marrkesh Agreement and four annexes.
Beyond trade in goods addressed trade in services, Protection IP, trade
related investment measures, trade remedies (safeguard, countervailing
measures, AD), technical barrier, sanitary and phytosanitary measures,
WTO, Agriculture, Textile, government procurement. Transform
Tokyo Round plurilateral codes into multilateral agreements

Cont’d
Establishing WTO is not among initial objective of Uruguay Round.
It was only in February 1990 that the then Italian Trade Minister, Renato Ruggiero
floated the idea of establishing a new international organization for trade.
A few months later, in April 1990, Canada formally proposed the establishment of what
it called a ‘World Trade Organization’.
Along the same lines, in July 1990, the European Community submitted a proposal
calling for the establishment of a ‘Multilateral Trade Organization’.
In November 1991, the European Community, Canada and Mexico tabled a joint
proposal which resulted, in December 1991, in the draft Agreement Establishing the
Multilateral Trade Organization.
The United States formally agreed to the establishment of the new organization on 15
December 1993.
The United States demanded a change of name as a condition for giving its consent. The
United States suggested that the name of the new organization should be the ‘World
Trade Organization’.

Cont’d…To Conclude
The average level of tariffs imposed by developed countries on industrial
products was brought down from over 40 per cent to less than 4 percent.
The first five rounds of negotiations focused on the reduction of tariffs.
From the Kennedy Round (1964–7) onwards, however, the negotiations
would increasingly focus on non-tariff barriers (which were becoming a
more serious barrier to trade than tariffs).
With respect to the reduction of non-tariff barriers, the GATT was
notably less successful than it was with the reduction of tariffs. Why?
Because, negotiations on the reduction of nontariff barriers were much
more complex and, therefore, required, inter alia, a more ‘sophisticated’
institutional framework than that of the GATT.

Principles of GATT 1947
1. Non-discrimination (MFN & NT)-Art. I & III
2. Reciprocity-mutual exchange of benefits, no free riding, cost
for liberalization. May not imply equality of giving and
receiving.
3. Enforceable Commitments or binding tariff-Art II
4. Transparency
5. Safety Valves to attain economic and non-economic
objectives
6. Elimination of QR-Art. XI
7. Regular Negotiations -Art. XXVIII biss

Organizational Structure of the GATT
1. Contracting Parties
2. Council Representatives
3. The GATT Council
4. GATT standing committees or councils
5. Ad hoc committees
6. Panels of Conciliation and
7. The GATT Secretariat (Interim Commission of
International Trade Organization)

World Trade Organizations
The Final Act of the Uruguay Round was formally signed
at a Ministerial Meeting in Marrakesh, Morocco on April
15, 1994. Become operational on January 1, 1995.
Has legal personality.
It has its origins in the Bretton Woods Conference
(1944).
Its origin lie in GATT 1947.
WTO is a continuation of the GATT system.
Decisions, procedures and customary practices of the
GATT 1947 still guide the WTO. See Article XVI (1)

Mandate of WTO
Objectives of WTO
1. Raising standards of living
2. Ensuring full employment
3. Ensuring progressive growth of real income and effective demand
4. Expanding production and trade in goods and services
This objective should be attained accordance with:
5. Sustainable development
6. Environment
7. Development need DC and LDC’s
Means of attaining
Entering to reciprocal and mutually advantageous arrangements directed to:
1) The substantial reduction of tariffs and other barriers to trade and
2) Elimination of discriminatory treatment in international trade relations.

Function of WTO-Art.III
Broadly….
1. Provide the common institutional framework for IT-Art.II:1.
Specifically….. Art. III
2. Administer trade agreements (facilitate implementation, administration
and operation, and further the objectives…).
3. Serve as trade negotiation forum for new and covered trade matters (see
next slide)
4. Settle trade dispute settlement (administer the Understanding on Rules and
Procedures Governing the Settlement of Disputes).
5. Review trade policies of members (Administer the Trade Policy Review
Mechanism)
6. Co-operates with the IMF, World Bank, UNCTAD, WIPO, OECD, WCO,
ITC, and others to ensure coherence in global economic policy-making.
7. Provide technical assistance to developing-country Members to integrate it
into the world trading system

Cont’d
WTO Members have negotiated and concluded, in the framework of the WTO, trade agreements
providing, inter alia, for:
1) Further market access commitments for specific services and service suppliers (on financial
services, on basic telecommunications services, and on the movement of natural persons);
2) Liberalization of trade in information technology products;
3) Amendment of the TRIPS Agreement regarding the rules on compulsory licensing to ensure
access for developing countries to pharmaceutical products;
4) Amendment of the Agreement on Government Procurement which expands the coverage
of and disciplines under this Agreement;
5) Facilitation of the flow of goods across borders by expediting their movement, release and
clearance (i.e. the Trade Facilitation Agreement); and
6) The accession of thirty six countries to the WTO.
Furthermore, negotiations within the WTO have resulted in a number of decisions by WTO
bodies,

Legal Framework of WTO
The final Uruguay WTO/Marrakesh
Agreement
legal text contain list
of about 60
agreements, annexes,
decisions and Multilateral trade Plurilateral
agreements/single Agreements/bind
understandings undertaking/binding only signatories of
all members specific PA.
Trade in goods Trade in services TRIPS DSU TRPM

Annexes of WTO Agreement
ANNEX 1: ANNEX 1A- Multilateral Agreements On Trade In Goods (GATT
1994, Agriculture, Sanitary and Phytosanitary Measures, Textiles and Clothing,
Technical Barriers to Trade, Trade-Related Investment Measures, Anti-dumping
Measures-Article VI of GATT1994, Custom Valuation-Article VII of GATT1994
Preshipment Inspection, Rules of Origin, Import Licensing Procedures,
Subsidies and Countervailing Measures, and Safeguards. ANNEX 1B General
Agreement on Trade in Services and Annexes. ANNEX 1C Agreement on
Trade-related Aspects of IPRs.
ANNEX 2- Understanding on Rules and Procedures Governing the Settlement
of Disputes (DSU).
ANNEX 3- Trade Policy Review Mechanism.
ANNEX 4- Plurilateral Trade Agreements ( Agreement on Trade in Civil
Aircraft, Agreement on Government Procurement, International Dairy
Agreement, International Bovine Meat Agreement).

Membership and Institutional Structure of WTO
Membership is not limited to state. Separate customs territories
possessing full autonomy in the conduct of their external commercial
relations. Example, Hong Kong, Macau, and Taipei of China.
Currently, its member is 169
Two ways of becoming a WTO Member:
1. ‘Original Membership’-Article XI:1 of the WTO Agreement, and
allowed Contracting Parties to the GATT 1947 (and the European
Communities) to join the WTO by: (1) accepting the terms of the WTO
Agreement and the Multilateral Trade Agreements; and (2) making
concessions and commitments for both trade in goods and services. This
was only available at the time of establishment of the WTO. 123 members
used this way!

Cont’d
2. Accession- Article XII.
This this way is open indefinitely.
To become a WTO Member through accession, a State or customs territory
has to negotiate the terms of accession with the current Members.
The applicant for membership must in principle always accept the terms of
the WTO Agreement and all Multilateral Trade Agreements. This is not up
for negotiation.
The accession negotiations focus on:
1. Whether the laws and practices of the applicant are WTO-consistent,
and, if not, what needs to be done to make them so; and
2. Market access concessions ( for trade in goods) and commitments ( for trade
in services) the applicant has to make.

Cont’d
Newly acceded member instantly benefits from all
the efforts that WTO Members have undertaken in
the past to reduce barriers to trade and increase
market access.
In return for the access to the markets, new Member
open up its market to the existing Members.
Generally, there are four phases in the accession
process.

Accession to WTO
Any state or customs territory having full autonomy in
the conduct of its trade policies may accede to the WTO,
but WTO members must agree on the terms.
Burdensome to late comer
Submission of
Bilateral Drafting
Memorandum of Decision/Approval
Negotiation membership term
Trade Regime

“tell us about yourself “. Submission of memorandum of Trade
Regime which describe all aspects of its trade and economic
policies that have a bearing on WTO
agreements
“work out with us individually what you have to offer”.
Bilateral negotiation between prospective new member and
individual countries. The best term apply to all members based
on MFN principle.
“let’s draft membership terms”. Drafting membership term or accession
terms by working parties. The working party finalizes the terms of accession
which are set out in: (1) a working, a draft membership treaty (“protocol of
accession”) and lists (“schedules”) of commitments
“the decision” The final package, consisting of the report, protocol and lists of
commitments, is presented to the WTO General Council or the Ministerial
Conference. If a two thirds majority of WTO members vote in favor, the applicant is
free to sign the protocol and to accede to the organization. In many cases, the country’s
own parliament or legislature has to ratify the agreement before membership is
complete. Protocol of accession become integral part of WTO Agreements

Waiver-Article IX:3
Exceptional circumstances’ may justify waiver obligation under WTO agreements.
The decision of the Ministerial Conference (or the General Council) granting the
waiver shall state the exceptional circumstances, the terms and conditions
governing the application of the waiver and the date on which the waiver shall be
terminated.
Any waiver granted for a period of more than one year is reviewed annually.
The General Council examines whether the exceptional circumstances justifying
the waiver still exist and whether the terms and conditions attached to the waiver
have been met.
On the basis of this annual review, the waiver may be extended, modified or
terminated.
Waiver interpreted strictly.

Optout/Non- Application Clause
It has to be invoked at the time that this Member, or the other, joins the
WTO.
The ‘opt-out’ clause cannot be invoked at any later time.
The decision to opt out must be notified to the Ministerial Conference
(or the General Council) before the latter decides on the accession.

Withdrawal, Suspension and Expulsion
Any Member may unilaterally withdraw giving six months to Director-
General of the WTO. Article XV:1
a Member withdraws from the WTO, it cannot remain a party to any of
the Multilateral Trade Agreements.
Withdrawal is thus an ‘all or nothing’ option.
To date, no Member has ever withdrawn from the WTO.
The WTO Agreement does – except in one specific situation not provide
for the suspension or expulsion of a Member.
The specific situation is non-acceptance of certain amendments to the
WTO agreements

Institutional /Organizational Structure of WTO-Art.IV
 Member-driven, neither board nor executive lead.
 Usually, decision is taken by consensus b/c of informal
consultation with WTO.

Good council 11 committee
financial services, domestic

Services Council regulations, GATS rules and
specific commitments
General Council
Ministerial council
TRIPS Council
TRPB
Committee on trade and
development, env’t, RTA
Panel
DSB
Appellate body

Cont’d
 Ministerial Conference- composed of representatives of all the Members. Meet at least once
every two years. Have the authority to take decisions on all matters under any of the MTAs.
 General Council-composed of representatives of all the Members. Meet as appropriate. In the
intervals between meetings of the MC, it conduct functions of MC. Convene as appropriate to
discharge the responsibilities of the Trade Policy Review Body and Dispute Settlement
Body.
 Council for Trade in Goods (Goods Council), a Council for Trade in Services (Services Council),
and a Council for Trade-Related Aspects of Intellectual Property Rights (Council for TRIPS)
operate under the general guidance of the General Council oversee the functioning of the MTAs
in Annex 1A, 1B and 1C respectively.
 Subsidiary bodies established by Council for Trade in Goods, the Council for Trade in Services
and the Council for TRIPS.
 Committee on Trade and Development, a Committee on Balance-of-Payments Restrictions and
a Committee on Budget, Finance and Administration established by MC.
 Bodies under PTAs.

WTO Secretariat- headed by a director-general
1. Administrative and technical support for WTO delegate bodies
(councils, committees, working parties, negotiating groups) for
negotiations and the implementation of agreements.
2. Technical support for LDC and DC.
3. Trade performance and trade policy analyses by WTO economists
and statisticians.
4. Assistance from legal staff in the resolution of trade disputes
involving the interpretation of WTO rules and precedents.
5. Dealing with accession negotiations for new members and providing
advice to governments considering membership

Decision-Making in the WTO
Article IX:1
 Except as otherwise provided, where a decision cannot be arrived at by
consensus, the matter at issue shall be decided by voting.
Each Member of the WTO shall have one vote. Where the European
Communities exercise their right to vote, they shall have a number of
votes equal to the number of their member States
Decisions shall be taken by a majority of the votes cast, unless otherwise
provided in this Agreement or in the relevant MTAs.
Standard decision-making procedure and special procedures

A. standard decision-making procedure
By consensus
The body concerned shall be deemed to have decided by consensus on a
matter submitted for its consideration, if no Member, present at the
meeting when the decision is taken, formally objects to the proposed
decision.
If consensus cannot be achieved, Article IX:1 of WTO Agreement
provides for voting-SIMPLE MAJORITY

B. Special Procedures
1. Decisions by consensus adopt panel and appellate body report,
appoint of member of AB
2. Decision to Pass Authoritative interpretations- ¾ Vote.
3. Decision on Accession-2/3 Vote
4. Decisions to waiver of obligation –consensus, ¾ if consensus
not reached within ninety days.
5. Decisions on amendments of the WTO Agreements- 2/3
6. Decisions on the annual budget and financial regulations- ¾
IN PRACTICE, WTO DECISIONS ARE TAKEN BY
CONSENSUS B/C OF GREEN ROOM MEETING.

Chapter II: Core Principles Under GATT
1. Non-discrimination (MFN and NT)

2. Biding Tariff commitment
3. Elimination of quantitative restriction
Do you remind means of attaining
WTO’s objectives? (liberalization and
Non-discrimination)

I. Non-Discrimination
 Trade without discrimination
 Identified as one means of attaining WTO’s objective
under preamble of WTO Agreement ..
 Composed of MFN and NT.
 Discrimination favor expensive and low quality
product.
 MFN-Prohibit discrimination among foreign like
products.
 NT-Prohibit discrimination against like or
substitutable foreign products.

A. Most Favored Nation Treatment
 Contributes to ensuring fair, predictable, and
liberalized IT relations.
 Is cornerstone or pillar of multilateral trading
system.
 It prohibit discrimination between like products
originating in or destined for different countries-
Canada – Autos (2000).
 It prohibits WTO Member from giving products
from WTO Member treatment less favourable
than the treatment it gives to like products from
any country.

Cont’d
 Its aim or purpose is ensuring equality treatment or

opportunity for import or export of like products
irrespective of its origin- EC – Bananas III (1997)
& EC – Seal Products (2014).
 MFN prohibit both de jure and defacto
discrimination (EEC – Imports of Beef (1981),
Canada – Autos (2000) & Seal Products (2014).
 Does the ‘spaghetti bowl’ or proliferation of RIAs
make MFN an exception? Read 2004 Sutherland
Report on The Future of the WTO, Par, 60.

MFN CLAUSES
General MFN Clause- Art.I

Specific MFN Clauses-Art.III:7-Local
Content Requirements; Art.V-Freedom
of Transit; Art. IX:1-Marks of Origin;
Art. XIII:1- Quantitative restrictions;
Art.XVII-State Trading Enterprises, and
Art.XX- General Exception chapeau.
Other MTAs in goods like TBT, SPS
and others has also MFN Clauses.
General MFN Clause-Art I(1)
1. With respect to customs duties and charges of any kind
imposed on or in connection with importation or
exportation or imposed on the international transfer of
payments for imports or exports and with respect to the
method of levying such duties and charges, and with
respect to all rules and formalities in connection with
importation and exportation and with respect to all
matters referred to in paragraphs 2 and 4 of Article III,
any advantage, favour, privilege or immunity granted
by any contracting party to any product originating in or
destined for any other country shall be accorded
immediately and unconditionally to the like product
originating in or destined for the territories of all other
contracting parties.

Cont’d
To date, in thirteen cases WTO members acted
inconsistently with MFN Obligation.
See EC – Bananas III (1997); Indonesia – Autos
(1998); EC – Bananas III (Article 21.5 – Ecuador)
(1999); Canada – Autos (2000); US – Certain EC
Products (2001); EC – Tariff Preferences (2004);
EC – Bananas III (Article 21.5 – Ecuador II)
(2008); EC – Bananas III (Article 21.5 – US)
(2008); Colombia – Ports of Entry (2009); US –
Poultry (China) (2010); EU – Footwear (China)
(2012); EC – Seal Products (2014); and US – Tuna
II (Mexico) (Article 21.5) (2015).)
Four MFN [In]consistency Tests
1. Whether the measure at issue is a measure
covered by Article I:1
2. Whether that measure grants any ‘advantage’
‘favour’ ‘privilege’ or ‘immunity’ ?
3. Whether the products concerned are ‘like
products’; and
4. Whether the advantage at issue is accorded
‘immediately and unconditionally’ to all like
products concerned, irrespective of their origin or
destination.
THESE FOUR QUESTIONS MUST BE ANSWERED IN ORDER
DECIDE ON THE ISSUE WHETHER THE MEASURE IN QUESTION
VIOLATE MFN TREATMENT OBLIGATION OR NOT!
1st- [Covered Measures]
 To amount violation of MFN, measure in question must be covered
one.
 Article I:1 covers a broader (but not unlimited-EC-Commercial Vessels)
ranges of both border and internal measures.
 Covered measures includes:
1. Customs duties; charges ofany kind imposed on or in
connection with import or export (e.g. import surcharges,
export duties, customs fees or quality inspection fees);
Charges imposed on the international transfer of payments
for imports or exports;
2. The method of levying such duties and charges, such as the
method of assessing the base value on which the duty or
charge is levied;
3. Safeguard measures, ADD, countervailing duties, Import
and export prohibitions and quotas, tariff quotas, import
licenses
Cont’d
4. All rules and formalities in connection with import

and export (e.g custom formalities); and
5. Internal taxes or other internal charges (Art.
III:2,GATT); and
6. Laws, regulations and requirements affecting internal
sale, offering for sale, purchase, transportation,
distribution or use of any product (Article III:4)
Subsides for domestic producer; laws, regulations and
requirements governing government procurement(Art
III (2 &4).), measure that grants an advantage to
adjacent countries in order to facilitate frontier traffic
are not covered. (Article XXIV:3(a)

2nd- Measures Granting Any Advantage….
 “Advantage, favour, privilege or immunity”.
 Broad, not limited custom but also laws,
regulations and requirements that have
bearing on export and import.
 DOES SUCH MEASURES CONFER
ADVANTAGE? or CREATE A MORE FAVORABLE
COMPETITIVE OPPORTUNITIES? EC –
Bananas III (1997)
 Actual trade effect of less favorable
treatment is not required.

3 Likeness or Like Product
rd-
 Products that are not ‘like’ may be treated
differently and not amount to discrimination.
 The concept of ‘like products’ is not defined in the
GATT 1994.
 “like products”. In Japan-Alcoholic Beverages II.),
the AB linked the concept of likeness of accordion
which stretches and squeezes.
 There is no simple and straight forward or unform
meaning or interpretation for likeness.
 It depend only based on the circumstances that
prevail in a given case. It has different scope or
width in different circumstances.
AB Illuminating Comment on Japan-
Alcoholic Beverages II
“The accordion of ‘likeness’ stretches and
squeezes in different places as different
provisions of the WTO Agreement are
applied. The width of the accordion in any
one of those places must be determined by
the particular provision in which the term
‘like’ is encountered as well as by the context
and the circumstances that prevail in any
given case to which that provision may
apply.”
Spain – Unroasted Coffee (1981)
 Spain did not apply customs duties to Colombian
mild’ and ‘other mild’, while it imposed a 7 per cent
customs duty on the other three types of unroasted
coffee.
 In examining whether the various types of unroasted
coffee were ‘like products’ to which the MFN
treatment obligation applied, the panel considered: (1)
the physical characteristics of the products; (2) their
end use; and (3) tariff regimes of other Members.
 Finally the panel concluded that the different types of
unroasted coffee should be considered to be ‘like
products’

Cont’d
Based on case laws, on case-by-case basis the following
shall be taken into account in deciding whether two
products are like or not:
1) The properties, nature and quality of the products
(physical characteristics)
2) The end-uses of the products (the same or similar
use or functions)
3) Consumers’ taste and habits (consumers’ perceptions
and behaviour, in respect of the products
substitutability)
4) The (International) tariff classification of the
products.
Is a product’s process and production method (PPM) is relevant in
determining whether products are ‘like’? Non-product-related processes
and production methods (NPR–PPMs)?
Which one is Like Products?
Orange juice and tomato juice?
Pepsi and Coca-Cola?
Soft drink and beer?
Beer and Wine?
Rousted and Unroasted coffees? Washed and
unwashed?
Sidama and Wonbera Coffee?
Case laws: See Brazil Coffee vs Spain, Japan's SPF
(spruce, pine, and fir) case, Spain –Unroasted
Coffee (1981), EC – Seal Products (2014), EC –
Asbestos (2001)
4th - Immediate and Unconditional
 Extension of MFN is not subject pre
condition like demand of reciprocal
treatment, passing of legislation or certain
actions.
 Any advantage, favor, privilege or immunity
shall be granted immediately/instantly and
unconditionally to like products irrespective
of their origin or destination.
 Otherwise, it amount to violation of MFN.
 See Belgium-Family Allowance,
Question
Does the term ‘unconditionality’ allows
discrimination between products not on the
basis of their origin?
1. ‘Unconditionality’ does not prohibit imposition
of conditions which do not discriminate
between products on the basis of their origin.
Canada-Autos (2000), Colombia-Ports of Entry
[2009], US-Poultry from China [2010].
2. ‘Unconditionality’ not prohibit imposition of
any conditions. EC-Tariff Preferences (2003)

Remarks
 MFN prohibit discriminate against like product,

not like suppler or country.
 MFN violation may happen even in case like
products concerned originate or destined from
one country.
 Only WTO member can claim based on MFN
clause of GATT.
 First recipient of advantage is not required to be
from WTO members.
 Best tool of liberalization and
multilateralization of member’s tariff schedules.
Exception to MFN
1. Historical preferences within the prevailing
margin at the start of Geneva Conference
(April 10, 1947)- Art I:2-4. This reflect the
need of colonial power to preserve their
tie…
2. Cinematographic Films- Article IV(C)
3. Non-Application of MTAs between
Particular Member States (Art.XXXV of
GATT and Art.XIII of WTO Agreement)

4. Regional Integration –Art.XXIV
 Such arrangement favor imports from members of region,
and discriminate against other countries.
 Is it building block or stumbling block for WTO or
Multilateral Trading system or Liberalized Trade?
 Is it part or sperate from multilateral trading system?
 Article XXIV are designed to ensure that countries which
form regional agreements move to genuinely free trade
among themselves, and provide adequate compensation for
any damage done to the trade interests of other WTO
members.
 The rules distinguish between two different forms of
arrangement, the customs union and the free trade area.
 The law has set strict criteria to reduce use of RI as
disguised restriction to free trade.
Cont’d
Free Trade Area and Custom Union- both involve the removal of
trade barriers among their members. However, the member
countries of customs unions all charge the same rates of import duty
and common other regulations on imports from non-
members( Article XXIV: 8(a)(ii)), while members of free trade areas
retain their own national tariffs.
Here, common import duties and other regulations affecting
imports into the union must not higher or more restrictive than
before union formation. In other words, common import duties and
other regulations affecting imports must not higher or more
restrictive on the whole than the overall level (general incidence) of
those of the original members before the union was formed( Article
XXIV: 5(a)).
There must removal duties and other restrictions affecting
‘substantially all the trade’ among members of union.
It require a detailed plan and schedule to show how the members
will move to free trade.
Cont’d
Article XXIV makes no mention of common markets or economic
unions.
Common Market- Free movement of labour and capital
within member’s territories. Extension of CU. Have a
common external tariff which is not higher than that of the
tariff rates applied by the individual states before the
formation.
Economic union-the harmonized of economic policies of
members. Extension of CU. The common market members
work towards the harmonization of their economic policies.
Have a common external tariff which is not higher than that
of the tariff rates applied by the individual states before the
formation Example, EU!
The last two adopt common external tariff which is not higher
than tariff imposed by individual states before forming union or
market. They have similar external policy with CU, higher level of
cooperation between
12/31/2021 members.
Desalegn D. Disassa (LL.B, LL.M) 83
Cont’d
Free
Custom Common Economic
Trade
Union Market Union
Area

5. General Exception (GATT Art.XX)
 Not a means of arbitrary or unjustifiable discrimination or a
disguised restriction.
 Nothing prevent the adoption or enforcement of measures:
1. Necessary to protect public morals;
2. Necessary to protect human, animal or plant life or
health;
3. Relating to the importation or exportation of gold or
silver;
4. Necessary to secure compliance with laws or regulations
which are not inconsistent with the provisions of this
Agreement,
5. Relating to the products of prison labour;
6. Imposed for the protection of national treasures of
artistic, historic or archaeological value;
Cont’d
7. Relating to the conservation of exhaustible natural
resources if such measures are made effective in
conjunction with restrictions on domestic production or
consumption;
8. undertaken in pursuance of obligations under any
intergovernmental commodity agreement…
9. involving restrictions on exports of domestic materials
necessary to ensure essential quantities of such materials
to a domestic processing industry during periods when the
domestic price of such materials is held below the world
price as part of a governmental stabilization plan provided
that…
10. essential to the acquisition or distribution of products in
general or local short supply provided that

Questions
Necessary vis-à-vis relating? Which
one is broader? Which one require
higher level or threshold to justify
the measures taken?
What is rational of chapeau of
Art.XX? Eliminating unjustified
discrimination and disguised
restriction! See this in light of
means of attaining GATT’s and
WTO’s objectives!
6. Security Exception-Art.XXI
Nothing in this Agreement shall be construed: (a)to require
any contracting party to furnish any information the
disclosure of which it considers contrary to its essential
security interests; or (b) to prevent any contracting party from
taking any action which it considers necessary for the
protection of its essential security interests(i) relating to
fissionable materials or the materials from which they are
derived; (ii) relating to the traffic in arms, ammunition and
implements of war and to such traffic in other goods and
materials as is carried on directly or indirectly for the purpose
of supplying a military establishment; (iii) taken in time of
war or other emergency in international relations; or(c) to
prevent any contracting party from taking any action in
pursuance of its obligations under the UN Charter for the
maintenance of international peace and security.
Cont’d
“considers necessary,” “essential
security interests,” “time of war,” and
“emergency in international relations.”
???? Is that use of Article XXI is
subject to review by a WTO panel??
The plain text suggest NO!, BUT MAY
NOT PERCLUDE WTO
JURISDCITION TO REVIEW!

7. Enabling Clause (1979 Decision)
 Aka 1979 GATT Decision on Differential and More
Favourable Treatment, Reciprocity and Fuller
Participation of Developing Countries.
 Result of Tokyo Round and constitute integral part
of GATT-1994.
 Allow Developed countries to provide Special and
Differential (preferential and more favorable)
Treatment for Developing and LDC’s under their
Generalized non-reciprocal preferences. Example,
Every thing but Army (EBA) which provide quota-
free and tariff-free access to EU Market for almost
all developing countries products. The same is true
for AGOA (Africa Growth Opportunity Act).
Conditions of Enabling Clause
Any differential and more favourable treatment provided
under this clause:
1. Shall be designed to facilitate and promote the trade of
developing countries and not to raise barriers to or
create undue difficulties for the trade of any other
[Members];
2. Shall not constitute an impediment to the reduction or
elimination of tariffs and other restrictions to trade on a
MFN basis;
3. Shall in the case of such treatment accorded by
[developed-country Members] to developing countries be
designed and, if necessary, modified, to respond
positively to the development, financial and trade
needs of developing countries.
Questions
Is that additional preferential treatment is allowed under
enabling clause?
See EC – Tariff Preferences (2004) (Mandatory)
Council Regulation (EC) No. 2501/2001 of 10 December 2001,
the EC’s former Generalised System of Preferences Regulation,
provided for five preferential tariff ‘arrangements’, namely: (1)
the ‘General Arrangements’; (2) special incentive arrangements
for the protection of labour rights; (3) special incentive
arrangements for the protection of the environment; (4) special
arrangements for least-developed countries; and (5) special
arrangements to combat drug production and trafficking.
India cliam special arrangements for the protection of labour
rights and environment as well as combating drug production
violate GATT’s preferential treatment for all DC? Panel decide
that the GSP of EC is inconsistent while AB decide it is
consistency!
8. Waiver- Art. IX:3 of WTO Agreement
The Fourth Lome Convention between the
European Union (EU) and the African
Caribbean and Pacific(ACP) countries was
granted a waiver at the 2001 Doha WTO
Ministerial Conference.
Members requesting a waiver must justify it
with sound economic analysis and arguments,
undergo a complex process of requesting WTO
authorization, and abide by stringent
conditions for maintaining the waiver if it
stretches over several years, including annual
reviews by the WTO.
B. National Treatment-Art.III
Requires WTO Members not to discriminate against
imported products once the imported products have entered
the domestic market.
Obliges Members of the WTO to provide equality of
competitive conditions for imported products in relation to
domestic products.
Eliminate or prohibit discrimination against imported
foreign products
It prohibits Members from treating imported products less
favourably than like domestic products once the imported
product has entered the domestic market, i.e. once it has
been cleared through customs.
Require WTO Members to provide national treatment to
“like and substitutable product” from all other WTO
Members.
Cont’d
 Its purpose is to avoid protectionism in the
application of internal tax and regulatory
measures.
 It provide equality of competitive
opportunities for imported products and like
domestic products’.
 Cover both de jure (in law) and de facto (in
fact) discrimination.
 Article III does not ‘require a demonstration
of the actual trade effects of a specific
measure’
Cont’d
 Scope of Article III is not limited to products
with respect which member has made tariff
concessions under Article II.
 Apply only to internal measures, not to
border measures like tariff. How distinguish?
Not simple. See Note Ad Article III.
Measure at the time or point of
importation is not internal measure.
 Measure which applies only to imported
products also fall within preview of Art.III
Art III-National Treatment on Internal Taxation and Regulation
1.The contracting parties recognize that internal
taxes and other internal charges, and laws,
regulations and requirements affecting the
internal sale, offering for sale, purchase,
transportation, distribution or use of products,
and internal quantitative regulations requiring
the mixture, processing or use of products in
specified amounts or proportions, should not be
applied to imported or domestic products so as
to afford protection to domestic production.

Cont’d
2.The products of the territory of any
contracting party imported into the
territory of any other contracting party
shall not be subject, directly or
indirectly, to internal taxes or other
internal charges of any kind in excess of
those applied, directly or indirectly, to like
domestic products… It also apply also to
a directly competitive or substitutable
product
Art III(2)-NT for Tax Consistency Tests
1. whether the measure at issue is an internal tax or other
internal charge on products- INTERNAL TAX
2. Whether is product is like or not, directly competitive or
substitutable? case-by-case basis- LIKENESS OR
COMPETITIVENESS
3. Whether these products are not similarly taxed-
DISSIMILAR TAXATION. No trade effect test!
4. Whether dissimilar taxation is applied so as to afford
protection to domestic producers- PROTECTION
5. In Korea – Alcoholic Beverages, the Appellate explained
that Article III aims at: …avoiding protectionism,
requiring equality of competitive conditions and
protecting expectations of equal competitive relationships
See Note Ad Article III.
3. ……
4. The products of the territory of any contracting
party imported into the territory of any other
contracting party shall be accorded treatment no less
favourable than that accord to like products of
national origin in respect of all laws, regulations and
requirement affecting their internal sale, offering for
sale, purchase, transportation, distribution or use.
The provisions of this paragraph shall not prevent
the application of differential internal
transportation charges which are based exclusively
on the economic operation of the means of transport
and not on the nationality of the product.
Art.III (4)-NT Consistency Test for Internal Regulation
1. Whether the imported and domestic

product is like product or not. case-by-
case basis
2. Whether measure at issue a ‘law, regulation,
or requirement’ is covered.
3. whether the regulatory distinction (laws,
regulations and requirements) between the
two products results in less favorable
treatment of imports.
See EC-Asbestos; Korea-Beef ; Canadian Beer case,
Korea – Various Measures on Beef (2001)).
Cont’d
Other paragraphs of Article III deal with the
application (or non-application) of the
national treatment obligations to particular
kinds of measures, such as:
1. Local content requirements (P 5);
2. Government procurement (P 8(a));
3. Subsidies to domestic producers (P 8(b));
4. Internal maximum price control measures
(P 9); and
5. Screen quotas for cinematograph films (i.e.
movies) (P 10).
To Conclude..
 Internal tax and other measures shouldn't imposed to afford protection
to domestic production
 Products imported from members of WTO shouldn’t subject internal
taxes or other charge in exceed of like domestic product.
 The product imported from WTO member shall be
accorded treatment no less favourable than that accord to
like products of national origin in respect of all laws,
regulations and requirement (internal measures)…
 Art III (1)- Avoid domestic protection
 Art III (2)- Avoid Tax discrimination between like (P1) and
substitutable or competitive (p2) domestic and foreign
products.
 Art III (4)- Avoid regulatory discriminations

Exception to NT
1. Government Procurement of domestic product- Article III:8(a).
However, Agreement on Government Procurement mandates NT. See
Canada – Renewable Energy / Feed-In Tariff Program (2013)
Case.
2. Domestic subsidies-Subsidies to domestic producers. Article III:8(b)
and the Agreement on Subsidies and Countervailing Measures.
3. Balance of payment- Article XVIII:B,
4. Economic Development Exceptions to promote domestic infant
industries- Article XVIII:C
5. General exceptions- Article XX
6. Security exceptions- Article XXI
7. waivers -WTO Article IX
8. Internal quantitative regulations relating to exposed cinematograph
films-Art III (10)

II. Binding Tariff Commitment-Art.II
Tariff is lawful instrument of protection. Means,

not prohibited, but reduced via negotiation and
bound under schedule .
Accord treatment no less favourable than what is
provided schedule of concession.
May accord treatment more favourable than what
is provided schedule of concession.
This principle is essential to reduce tariff barrier
by allowing further negotiation and reduction
while abide by the schedule of tariff concession or
tariff binding.
A tariff concession, or a tariff binding, is a
commitment not to raise the customs duty on a
certain product above an agreed level.
Cont’d
 The tariff concessions or bindings of a
Member are set out in that Member’s
Schedule of Concessions (also referred to as
a Goods Schedule)
 The Schedules of Concessions resulting from
the Uruguay Round negotiations are all
annexed to the Marrakesh Protocol to the
GATT 1994.
 Schedules of Members are an integral part of
the GATT 1994-Article II:7

III. Elimination of Quantitative Restriction- Art. XI
Restriction or prohibition on
export or import through quotas,
import or export license or other
measures is prohibited.
Restrictions through duties,
taxes or other charges is not
prohibited.
Exception to Elimination of QR
1) To prevent or relieve critical shortages of
essential foodstuffs or other product (Article
XI:2)
2) To apply standards or regulations for the
classification, grading or marketing of
commodities.
3) IR on any agricultural or fisheries product,
necessary to the enforcement of governmental
measures which operate to restrict production of
the domestic product or for certain other
purposes
4) General exceptions -Article XX
Cont’d
5) Security exception-Art.XXI
6) BOP exception- Art. XII (all countries)and Article
XVIII:B(applies to DC’s and LDCs), Art.XV:2
7) Infant industry exception- to protect infant
industry member early stages of economic
development –Art.XVIII:C, D
8) Safeguard exception- protect domestic producer
from serious injury which arise from sudden
increase in import-Art.XIX
9) QR imposed with the authorization of the DSB as
retaliatory measures- Art.XXIII:2
10) Waiver obligation with respect to prohibition of
QR
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International Trade Law

12/31/2021 Desalegn D. Disassa (LL.B, LL.M) 1

Contemporar Trade in Trade

12/31/2021 Desalegn D. Disassa (LL.B, LL.M) 2

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Free Trade Liberalization Protectionism Autarky

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B. Absolute Cost Advantage Theory (Adam Smith)- a country should

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Trade in goods Trade in services TRIPS DSU TRPM

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