International Law Trade

Foundations of Law

International Business Law

In this coursework I have been asked to complete all the questions which relates to the World Trade Organisation (WTO) Agreement on Technical Barriers to Trade and also discussing briefly any disputed cases within the WTO Agreement on Technical Barriers to Trade.

In order for me to support my coursework I will browse through various academic articles, journals, books and other forms of resources, which would help me to complete the coursework given.

Q1 Find the text of the WTO Agreement on Technical Barriers to Trade and explain briefly the content of the Agreement.

A:

Agreement on Technical Barriers on Trade summary

The Technical Barriers to Trade (TBT) agreement is an attempt to improve the International Production or the Manufacture of Goods and Services, and to facilitate the administration of Trade in the International scene.

Therefore, the object of the TBT Agreement is to ascertain that technical policies and measures, as well as the evaluation procedures for compliance with such technical guidelines and standards, do not give rise to superfluous restrictions to international trade.

However, the Agreement’s Preamble states that any member nations should not be prohibited from adopting the systems and standards necessary to safeguard human, or to protect the environment; or to prevent misleading practices, at the levels of each member nation regards as appropriate.

Furthermore, this means that the Agreement grants to its member nations the right to prepare, adopt, or apply technical regulations within their national boundaries.

Additionally, the TBT Agreement requires that each member nation to prepare its technical regulations based on flexible requirements to fulfil a lawful purpose, such as requirements of national safety; the avoidance or deterrence of unreliable practices; and protection of human health or well-being, animal life and health, plant life and health, or the environment.

This is to avoid needless impediments to international trade which can result

• When a policy is more constraining than required;

• When such regulation does not fulfil a legitimate objective as described above; or

• When conformity assessment procedures are more rigorous and more lingering than are necessary to measure if a product meets the terms of the domestic policies and regulations of the importing nation.

Moreover, the Article 2.8 of the WTO Agreement also provides that wherever fitting, any member countries shall spell out technical measures based on product requisites in terms of function rather than motif or descriptive attributes.

Furthermore, the TBT Agreement also imposes a set of rules for the preparation, assumption and implementation of technical measures and standards by central legislative bodies, local governing units and non-governmental organisations, and outlines the procedures for conformity evaluation by such stratified groups.

Likewise, the Agreement also provides for the formation of national enquiry points to provide access to relevant information on the technical systems and standards, along with the conformity evaluation procedures in each participating nation.

The above information or the text of the Agreement was found in

http://www.wto.org/english/res_e/booksp_e/analytic_index_e/tbt_01_e.htm

http://www.wto.org/english/res_e/booksp_e/analytic_index_e/tbt_02_e.htm

Q2 List cases decided by the WTO dispute panels and Appellate Body relating to the interpretation of the WTO Agreement on Technical Barriers to Trade and briefly explain what two of the cases stated about the interpretation of the Agreement.

A:

Member countries often call upon the Dispute Panels of the WTO and the Appellate Body for settlement of overlapping claims on varying interpretations of the WTO Agreement on TBT.

Two of such cases include the EC-Asbestos and EC-Hormones disputes. In the EC-Asbestos dispute, the appellant country (i.e. Canada) argued that the TBT provisions applied to the French Decree in question, which generally prohibits the importation, selling and utilisation of asbestos and asbestos-containing commodities with a few exceptions, for the reason that it was considered a “technical regulation” within the implication of Annex 1, paragraph 1 of the TBT.

Therefore, the Panel rejected Canada’s claims and adjudged that the portion of the French Decree pertaining to the prohibition on importations of asbestos and asbestos-containing commodities did not signify a “technical regulation” hence the TBT Agreement cannot be applied to such portion of the Decree.

Moreover, the Appellate Body upturned the Panel conclusion and ruled that it was obligatory to wholly consider the decree in question, including the prohibitive and the permissive elements thereof.

The WTO Appellate Body also concluded that it could not investigate the Canadian argument that the decree in question was inconsistent with the provisions of the TBT. It upheld the WTO Panel’s conclusion that the French Decree was necessary to safeguard human health or well-being, animal or plant life or health.

In the EC-Hormones case, the appellant countries (i.e. United States and Canada) contended that procedures assumed by the European Communities did not comply with (i) Articles III or XI of the GATT; (ii) Articles 2, 3 and 5 of the SPS; and (iii). However, Article 4 of the Agreement on Agriculture. The WTO Panel adjudged that, since the measures in question deal with sanitary measures, the TBT was irrelevant to the dispute.

The above information details is available in the Bibliography section

Q3 List, with full references, four journal articles published in 2005 on the implementation, interpretation and / or effects of the WTO Agreement on Technical Barriers to Trade. You should look at more than one electronic database. Briefly summarise, in your own words, what one of these articles has to say about the interpretation of the Agreement.

A:

Varying interpretations and implementations were accorded to the TBT Agreement as shown in existing literatures on the concept of International Trade. The ISEAL Alliance and Centre for International Environmental Law in July 2006 discusses, primarily, the relevance and application of the TBT Agreement and, specifically, the implications for Non-Product Related (NPR) Process and Production Method or (PPM) standards.

However, the said article arrives at two conclusions. One is that it is widely assumed that the TBT provisions indicates that the Agreement does not pertain to PPMs that has no relation with the product, for this reason, said Agreement could not restrict the government bodies from adopting a mandatory or voluntary PPM technical regulations and standards.

Alternatively, if PPM standards are found to be within the range and provisions of the TBT, then the Agreement calls for relevant international measures as bases for the technical policies of governments, exempting only where they would be ineffective or unfitting.

Moreover, the article, “Assessing the Benefits of Trade Facilitation: A Global Perspective,” which was published in The World Economy in June 2005 and written by John S. Wilson, Catherine L. Mann, and Tsunehiro Otsuki (2005), takes into account the linkage between trade administration and trade streams in 75 countries from 2000-2001 using a pane of disaggregated manufactured products.

Therefore, the study determines that reform and capacity building in trade administration in areas linked to Articles V, VIII and X of the GATT which are, under the discussion at the WTO, which also could expand trade and exports significantly.

In the article, “Domestic Regulation, International Standards, and Technical Barriers to Trade,” published in the World Trade Review in 2005, Jan McDonald (2005) relates the use of domestic product regulations as technical roadblocks to trade and to WTO’s incursion into domestic regulatory autonomy.

The article states that the TBT Agreement seeks to balance competing interests by acknowledging and disciplining the member nations’ regulatory control over traded commodities.

This implies that while the member countries remain entitled to prepare and adopt their own technical trade measures in some instances, the emphasis on international standards raises the status of standard-setting bodies.

It proposes that in order to achieve the TBT Agreement’s trade facilitation and harmonisation objectives, the development and use of international regulations and their legitimate recognition within the WTO authorities should be revised to safeguard legitimate non-trade regulatory aims.

The article “Reducing standards-related barriers to trade,” published in the Forest Products Journal on July 1, 2005, offers information on more than 50 propositions for alleviating trade-related obstacles and demands more extensive partnership across the U.S. government and industry to prevent technical barriers that hamper U.S. exports.

In Paul Brenton and Marc Vancauteren’s 2001 article entitled “The Extent of Economic Integration in Europe: Border Effects, Technical Barriers to Trade & Home Bias in Consumption,” identifies the effect of technical obstacles on the importations of member states of the European Union (EU) was identified by approximating gravity formulas applied to data in which segments are categorised based on the model applied by the EU to the elimination of technical regulatory barriers, including sectors whereby the technical systemic barriers are construed to be unnecessary.

Furthermore, finding the aspects other than regulation-induced barriers are essential indicators of the strength of domestic relative to external trade streams as shown by high-level and enduring peripheral effects instituted for sectors where technical barriers are unnecessary.

The above information is available in:

Brenton, Paul and Vancauteren, Marc. (August 2001). The extent of economic integration in Europe: Border Effects, Technical Barriers to Trade & Home Bias in Consumption. Ceps working document no. 171.

McDonald, Jan. (2005). Domestic regulation, international standards, and technical barriers to trade. World trade review, 4(2), 249-274.

Wilson, John S., Mann, Catherine l. and Otsuki, Tsunehiro. (June 2005). Assessing the Benefits of Trade Facilitation: A Global Perspective. The world economy, 28(6), 841-871.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=741824

Reducing standards-related barriers to trade. (July 1, 2005). Forest Products Journal. http://goliath.ecnext.com/coms2/summary_0199-4700983_ITM

International Standards and Technical Barriers to Trade: R053 – Legal Opinion Summary. (July 2006). ISEAL Alliance and Centre for International Environmental Law.

http://www.ciel.org/Publications/ISEALCIEL_Legal%20OpinionTBTR053_Jul06.pdf

Q4 Give the full title and Official Journal references for legislation adopted by the European Communities that refers to the Agreement on Technical Barriers To Trade. List all the European Court of Justice Cases (with full names and citations from the European Court Reports) that have referred to the Agreement in the last five years.

A:

Legislation Adopted By the European Communities (EC) With Reference To the TBT Agreement

Various legislations pertaining to the TBT Agreement were adopted by the European Communities (EC), which include:

• Multilateral Agreements resulting from the trade negotiations of 1973-1979 (GATT) – Agreement on technical barriers to trade. Official Journal, L 71, 17.3.1980, p. 29–43;

• Agreement on the European Economic Area – Protocol 47 on the abolition of technical barriers to trade in wine. Official Journal, L 1, 3.1.1994, p. 210–217; and

• Uruguay Round of Multilateral Trade Negotiations (1986- 1994) – Annex 1 – Annex 1A – Agreement on Technical Barriers to Trade (WTO-GATT 1994). Official Journal, L 336, 23.12.1994, p. 86–99.

European Court of Justice Cases With Reference to the TBT Agreement

Listed below are cases reported before the European Court of Justice that have, directly or indirectly, referred to the TBT Agreement from 2005-2008.

• Directive 2001/37/EC – Manufacture, presentation and sale of tobacco products – Article 8 – Prohibition of placing on the market of tobacco products for oral use – Validity – Interpretation of Articles 28 EC to 30 EC – Compatibility of national legislation laying down the same prohibition. Case C-210/03. Swedish Match AB and Swedish Match UK Ltd v Secretary of State for Health. European Court reports 2004, Page I-11893.

• Environment – Free movement of goods – Packaging and packaging waste – Directive 94/62/EC – Deposit and return obligations for non-reusable packaging that depend on the overall percentage of reusable packaging. Case C-309/02. Radlberger Getränkegesellschaft mbH & Co. and S. Spitz KG v Land Baden-Württemberg. European Court reports 2004, Page I-11763.

• Environment – Free movement of goods – Packaging and packaging waste – Directive 94/62/EC – Exploitation and marketing of natural mineral waters – Directive 80/777/EEC – Deposit and return obligations for non-reusable packaging that depend on the overall percentage of reusable packaging. Case C-463/01. Commission of the European Communities v Federal Republic of Germany. European Court reports 2004, Page I-11705.

The above information detail is available in the Bibliography section.

Q5 List any cases decided in the UK courts that have referred to the Agreement on Technical Barriers to Trade

A:

UK Court Case With Reference to the TBT Agreement

The UK-Spain Cod Fishing Dispute was a case participated in by the United Kingdom but was dealt within the European Court of Justice.In 1988, the United Kingdom enacted the Merchant Shipping Act in an attempt to preserve its fish stocks.

The Merchant Shipping Act stipulates that 75% of all ships and fishing industries operating in the UK seas had to be British-owned and likewise, 75% of the crews on all ships registered in the UK had to be citizens of the UK.

However, it was aimed at restricting other countries from quota hopping by registering under the British flag and using the UK’s fishing quotas. Spain brought the case to the European Court of Justice, arguing that the Merchant Shipping Act was a protectionist barrier. The European Court of Justice concluded that the Merchant Shipping Act was indeed protectionist and ordered the UK to pay damages.

The above information is available in: Fish Case Study Analysis:

http://www.american.edu/TED/projects/tedcross/xfish1.htm

Q6 Consider the following two fictions scenarios and discuss whether in each case the action of the UK government contravenes the Agreement on Technical Barrier to Trade:

• Fiji produces a confectionery called Fijiruma which it exports to countries all over the world. In the United Kingdom, a very expensive confectionery called Figirama is produced. The producers of Figirama think that sales of Fijiruma in the United Kingdom are reducing their own sales: it is a similar product but sold at a much lower price. They also claim that the ingredients from which Fijiruma is made are inferior in quality and customers are being misled by the similarity in names. They lobby the United Kingdom government minister responsible for confectionery matters, the Minister for Confectionery Goodness. As a result, the Government adopts a new regulation banning the import of Fijiruma.

A:

Application of the TBT Agreement

In conclusion, this paper attempts to apply the provisions of the TBT by analysing a fictitious scenario as follows:

Fiji produces a confectionery called Fijiruma which it exports to countries all over the world. In the United Kingdom, a very expensive confectionery called Figirama is produced. The producers of Figirama think that sales of Fijiruma in the United Kingdom are reducing their own sales: it is a similar product but sold at a much lower price. They also claim that the ingredients from which Fijiruma is made are inferior in quality and customers are being misled by the similarity in names. They lobby the United Kingdom government minister responsible for confectionery matters, the Minister for Confectionery Goodness. As a result, the Government adopts a new regulation banning the import of Fijiruma.

Therefore, the Article 2.2 of the TBT Agreement clearly states that the member nations “shall ensure that in respect of technical regulations, products imported from the territory of any member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.”

To put it simply, technical regulations and standards must not discriminate between national products and like products that are imported.

However, in this case, the UK government’s resolve of adopting a new regulation that bans the import of Fijiruma contravenes such provision. The UK government had adopted and applied a technical regulation which simply protected its domestic industry because of a perceived threat from an imported product.

Whereas the UK government could have employed alternative measures to address the complaint of its resident industry which are less trade-restrictive on the part of the Fijiruma exporters, the UK government opted to place a ban on the import of Fijiruma thereby causing impediment to the trade expansion of Fiji’s confectionery product to the United Kingdom, a scenario that the TBT Agreement aims to avoid.

Moreover, it can be deduced that the Figirama producers’ complaint is mainly triggered by the reduction in its sales, Fijiruma being seen as a threat to its capability for higher or maximised profit.

The near similarity in names, in fact, cannot be taken as a deliberate attempt, on the part of the Fijiruma exporters, to confuse or mislead the UK market since the name Fijiruma can very well be intended to associate or identify the product to its country of origin, i.e. Fiji, as it is a commodity exported to countries all over the world and not just the United Kingdom.

This implies that the UK government’s new regulation did not fulfil a legitimate objective as defined in the TBT Agreement and it just created an unnecessary obstacle to international trade. This scenario is indeed a clear case of domestic protectionism on the part of the UK government.

Bibliography

Agreement on Technical Barriers to Trade.

http://www.wto.org/english/res_e/booksp_e/analytic_index_e/tbt_01_e.htm http://www.wto.org/english/res_e/booksp_e/analytic_index_e/tbt_02_e.htm

Brenton, Paul and Vancauteren, Marc. (August 2001). The Extent of Economic Integration in Europe: Border Effects, Technical Barriers to Trade & Home Bias in Consumption. CEPS Working Document No. 171.

Fish Case Study Analysis.

http://www.american.edu/TED/projects/tedcross/xfish1.htm

International Standards and Technical Barriers to Trade: R053 – Legal Opinion Summary. (July 2006). ISEAL Alliance and Centre for International Environmental Law. http://www.ciel.org/Publications/ISEALCIEL_Legal%20OpinionTBTR053_Jul06.pdf

McDonald, Jan. (2005). Domestic regulation, international standards, and technical barriers to trade. World Trade Review, 4(2), 249-274. http://www98.griffith.edu.au/dspace/bitstream/10072/4675/1/30697.pdf

Reducing standards-related barriers to trade. (July 1, 2005). Forest Products Journal. http://goliath.ecnext.com/coms2/summary_0199-4700983_ITM

Wilson, John S., Mann, Catherine L. and Otsuki, Tsunehiro. (June 2005). Assessing the Benefits of Trade Facilitation: A Global Perspective. The World Economy, 28(6), 841-871.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=741824