1、CHAPTER 7 TRADE IN GOODSCHAPTER 7TRADE IN GOODSTopics for this chapter:lHistory of Contemporary International Trade LawlThe World Trade OrganizationlThe 1994 General Agreement on Tariffs and TradelMultilateral Trade Agreements精品资料History of Contemporary International Trade Law lDuring the past six d
2、ecades, there has been a movement away from tariffs and quotas and toward free trade among nations.lThere has been a shift away from protecting ones own businesses toward multilateral efforts to reduce tariffs and other trade barriers.ProtectionismlThe US raised tariffs on more than 900 items in 193
3、0 and major trading nations reciprocated with similar increases.lRoosevelt advocated lowering tariffs as part of his recovery plan from the Great Depression.lStarting in 1934, the US entered into bilateral trade negotiations to mutually lower tariffs.lThe end of WWII led to an integrated internation
4、al system to encourage trade liberalization and multilateral economic cooperation. The Bretton Woods SystemThe Bretton Woods SystemlWas supposed to create a system that would promote trade liberalization and multilateral economic cooperation.lIntended to create a multilateral institutional framework
5、 of rules and obligations through three organizations:International Monetary Fund (IMF)International Bank of Reconstruction and Dev. (IBRD)International Trade Organization (ITO)lITO charter never submitted by Pres. Truman to Senate for confirmation due to fear that it would be defeated, harming U.S.
6、 foreign relations.The 1947 General Agreement on Tariffs and TradelInstead of the ITO, the developed market-economy countries entered into the General Agreement on Tariffs and Trade (GATT) 1947, a multilateral agreement that set out the rules under which the contracting states were committed to nego
7、tiate reductions in customs tariffs and other impediments to international trade in goods.lGATT 1947 came to govern almost all of the worlds trade. Main Principles of GATT 1947lTrade discrimination forbidden. Each state had to afford most-favored-nation status to all other contracting states equally
8、; foreign goods treated the same as domestic goods according to the national treatment principle.Most-favored-nation status: When a GATT member nation sets a favorable tariff rate on a particular type of goods imported from one GATT member, the same tariff rate must be set on those goods for other G
9、ATT nations. Main Principles of GATT 1947National treatment principle: Once goods are legally imported, they must be treated the same way as domestic goods. lOnly barriers that one contracting state could use to limit the importation of goods from another contracting state were customs tariffs.lThe
10、trade regulations of contracting states had to be transparent.2.Transparent: trade regulations GATT members must be published and available to members. Main Principles of GATT 1947lCustoms unions and free trade agreements between contracting states were acceptable for liberalizing trade so long as t
11、hey did not discriminate against third-party GATT states. lGATT states were only allowed certain charges on imported goods:lImport tax equal to internal taxeslAntidumping dutieslCountervailing duties to counteract foreign export dutieslFees and proper charges for services renderedMultilateral Trade
12、NegotiationslTo update GATT 1947, contracting parties participated in multilateral trade negotiations (MTNs), which are known as rounds.lThe first five rounds were mostly devoted to reducing tariffs. The last three completed rounds expanded to handle non-tariff matters. The eight rounds were:lGeneva
13、 1947lAnnecy, France (1949)lTorquay, England (1950-1951)Multilateral Trade NegotiationslGeneva (1955-1956)lDillon Round Geneva (1961-1962)lKennedy Round Geneva (1964-1967)Established the practice of setting an agenda and defining the techniques for GATT negotiations.Declared across the board tariff
14、reductions.Allowed developing states to not exercise reciprocity with developed states.Produced agreement on antidumping.Multilateral Trade NegotiationslTokyo Round Geneva (1973-1979)Produced several special agreements (codes)Customs valuationSubsidies and countervailing measuresAntidumpingStandards
15、Import licensingGovernment procurementMultilateral Trade NegotiationsTokyo Round (continued)Also reached agreements in three special sectors:Civil aircraftDairy productsBovine meatUruguay Round in four cities (1986-1994)Established the World Trade OrganizationMeat production and exportation has been
16、 an issue at many sessions of three different rounds. Photo: Karissa HambletEx. 7-2 Results of the Uruguay Round Multilateral Trade Agreements binding on all members.Plurilateral Trade Agreements only binding on states who accept. The World Trade OrganizationlThe WTO is an intergovernmental organiza
17、tion responsible for:lImplementing, administering, and carrying out the WTO Agreement and its annexes.lActing as a forum for ongoing MTNs.lServing as a tribunal for resolving disputes.1.Reviewing the trade policies and practices of WTO members.www.wto.orgThe WTO AgreementlTransformed GATT 1947, whic
18、h was a trade accord serviced by a professional secretariat, into a membership organization. The original membership of 125 in 1994 has grown to more than 150.lWTO was created as a unified administrative organ to oversee the Uruguay Round Agreements.lDoes not create a new supranational organization.
19、 Is guided by the procedures, customary practices, and decisions of the old GATT. The WTO has no more power than GATT did under previous agreements.WTO MembershiplThe Ukraine entered the WTO in February 2008, bringing the membership to 151 nations.lGATT 1947 members and EU members were eligible to b
20、ecome original members.lAny new member must negotiate entry into the WTO and be approved by 2/3 of the members.lMembers may withdraw from the WTO with six months notice to the director-general. Structure of the WTOlThe WTO has five main organs:la Ministerial Conference,la General Council (acts as Di
21、spute Settlement Body and Trade Policy Review Body),la Council for Trade in Goods,la Council for Trade in Services, andla Council for Trade-Related Aspects of Intellectual Property Rights. lAll members belong to the Ministerial Conference and the General Council.1.The General Council names the membe
22、rs of the other organs.Ministerial ConferencelMeets at least every other year to oversee the operation of the WTO.lHas five standing committees that deal with:ltrade and development;lbalance-of-payment restrictions;lbudget, finance, and administration;ltrade and environment; and1.regional agreements
23、.General CouncillCarries on function of Ministerial Conference between meetings.lConvenes to operate as:WTO Dispute Settlement BodyWTO Trade Policy Review BodylOversees subordinate committees and the implementation and administration of the three main WTO agreements: GATT 94, GATS, and TRIPS.lArrang
24、es effective cooperation with IGOs and NGOs in matters of interest to the WTO.Decision Making Within the WTOlThe WTO continues the practice of decision making by consensus followed under GATT 1947.lConsensus is the making of a decision by general agreement in the absence of any voiced objection.lA d
25、ecision can be made by simple majority vote if a consensus is not reached.WaiverslA waiver is the relinquishment of an obligation owed by another.lUnder GATT 1947, a country could avoid trade regulations by getting a waiver.lThe WTO terminated existing waivers in 1996.lTo get a new waiver, the membe
26、r state mustldescribe the measure that it proposes to take,lspecify the policy objectives it seeks to obtain, lexplain why it cannot achieve these objectives without violating GATT 1994.1.The Ministerial Conference must approve.The 1994 GATTlGATT 1994 is the Annex to the Agreement Establishing the W
27、TO that sets out the rules under which members of that organization are committed to negotiate reductions in customs tariffs and other impediments to international trade in goods.lGATT 1947 continues to exist and countries may be members of both.lWTO is guided by the decisions, procedures, and custo
28、mary practices followed by the parties of the GATT 1947. Direct EffectlDirect effect: the principle whereby a treaty may be invoked by a private person to challenge the actions of a state that is party to the treaty.lSome GATT 1994 provisions are directly effective. Provisions that prohibit a state
29、from taking action contrary to the General Agreement are directly effective.WTO headquarters in Geneva, Switzerland (Drawing courtesy of M. Nicole, Los Angeles.)Case 7-1Finance Ministry v. Manifattura Lane Marzotto, SPAlPlaintiff sued Finance Ministry for imposing an administrative services duty on
30、Australian wool it imported.lManifattura claimed that this duty violated GATT 1947 Article III (1)(b) as it exceeded the duties set out in the Agreements annexes and schedules.lFinance Ministry claimed Article III(1)(b) was not directly effective.Case 7-1Finance Ministry v. Manifattura Lane Marzotto
31、, SPAlHeld: GATT provision that prohibits GATT member from increasing duties above the established levels when member acceded to agreement is directly effective. It was part of Italian law and private company could sue to enforce it. NondiscriminationlThe most fundamental principle of GATT.lInternat
32、ional trade should be conducted without discrimination.lNondiscrimination enforced through most-favored-nation and national treatment rules.The MFN RulelGATT requires each member to apply its tariff rules equally to all other members. The rule does not apply to:The use of measures to counter dumping
33、 and subsidization.The creation of customs unions and free trade zones.Restrictions that protect public health, safety, welfare, and national security. Developed states may also adopt measures that give preference to developing states. Preferential Treatment SchemeslGeneralized System of Preferences
34、 (GSP): Allows developing countries to obtain tariff concessions from a developed state on a nonreciprocal basis.lSouth-South Preferences: Allows developing states to grant tariff preferences to each other without having to grant them for developed states.lThese preference schemes operate as excepti
35、ons to the MFN rule.The National Treatment RulelOnce imported goods are within the territory of a state, that state must treat those goods no less favorably than it treats its own domestic goods.lArticle III requires the same nondiscriminatory requirement with respect to internal taxes.Case 7-2Japan
36、-Taxes on Alcoholic BeverageslCanada, the EU, and the US complained that Japan imposed lower taxes on locally produced alcohol than it did on imported alcoholic beverages.lGATT Article III:1 states “The contracting parties recognize that internal taxesshould not be imposed to importedproducts so as
37、to afford protection to domestic production.”lProducts imported from contracting party shall not be subject to internal taxes in excess of those applied to like domestic products. Case 7-2Japan-Taxes on Alcoholic BeverageslThe Panel found that shochu and vodka were like products, and vodka was being
38、 taxed in excess of shochu.lJapan was requested to bring the Liquor Tax Law into conformity with GATT 1994. The Panel also applied its finding to its whiskey, brandy, rum, gin, genever, and liqueurs.Protection Only Through Tariffs lEach member state may protect its domestic industries only through t
39、he use of tariffs that must be collected only at the time of importation.lQuotas are not allowed.lExceptions to the principle of protection through tariffs include:lImposition of temporary export prohibitions to prevent critical shortages1.Use of restrictions related to application of standards for
40、classifying, grading, or marking commoditiesProtection Only Through TariffslUse of quantitative restrictions on import of agricultural and fisheries products to stabilize national agricultural markets lUse of quantitative restrictions to safeguard a states balance of paymentslUse of quantitative res
41、trictions by a developing state to further its economic development. lTariff reductions are recorded at Schedules of Concessions annexed to GATT. A bound tariff rate represents the highest tariff rate a WTO member may set on imports from another state. TransparencylTransparency is the principle that
42、 governments must make their rules, regulations, and practices open and accessible to the public and other governments.lMembers must strive to simplify their import and export formalities.lThese principles are important to the way countries classify imports for imposing duties.lThe Convention on Nom
43、enclature for the Classification of Goods in Customs Tariffs created the Harmonized System for classifying goods for customs purposes. Regional IntegrationlGATT encourages WTO members to participate in:lFree trade areas a group of states that have reduced or eliminated tariffs among themselves that
44、maintain their own individual tariffs in dealing with other states.lCustoms unions a group of states that have reduced or eliminated tariffs among themselves and have also established a common external tariff. lGATT rules apply to the free trade area or customs union as a whole and not to its consti
45、tuent states.Commodity ArrangementslCommodity arrangements are intergovernmental agreements regulating the production and supply of primary commodities.lPrimary commodities are products obtained by extraction (e.g. iron ore) or harvest (e.g. coffee) that require minimal processing before being used.
46、lOnce founded, the organizations created by commodity agreements operate independently. They normally have a council made up of representatives and a permanent secretariat.lStabilization programs set quotas, buy/sell at agreed upon prices, and finance buffer stocks.Commodities ArrangementslMembers m
47、ay participate in commodities agreements as long as they involve both the importing and exporting states and are submitted to the WTO for approval.An Integrated Program for Commodities was proposed by UNCTAD to provide a common fund to underwrite the costs of maintaining a buffer stock of primary co
48、mmodities as a way to stabilize supplies. Commodities programs were set up for cocoa, coffee, rubber, sugar, and tin, but the Common Fund has yet to be funded. Escape ClauselArticle XIX of GATT 1994 is an escape clause that allows a WTO member state to escape temporarily from its GATT obligations wh
49、en there is a surge in the number of imports coming from other member states.lThe injured state can impose emergency restrictive trade measures, called safeguards.lA state using the escape clause must notify WTO, and negotiate with exporting state, or else the exporting state can retaliate.Exception
50、slGATT understood that sometimes states need to take certain measures as a matter of public policy that conflict with GATTs goal of liberalizing trade. These are set forth in GATT as General Exceptions and Security Exceptions.lExamples of general exceptions include measures that:are necessary to pro
