1、1,A SHORT COURSE IN INTERNATIONAL TRADE LAW,Professor David A. Gantz University of Arizona, James E. Rogers College of Law Hanoi, August 2004 Sponsored by The U.S.-Vietnam Trade Council Education Forum ,2,I. Introduction,Teaching intl trade law is difficult: Issues

2、 are complex Too much material to cover adequately in a 3 hour one semester course There are constant important changes from year to year Case study is required for understanding of WTOs Appellate Body, even for civil lawyers,3,I. Introduction, contd.,Definition of international trade law (not the s

3、ame as intl commercial law) GATT/WTO History Basic Principles GATT/WTO Exceptions to GATT/WTO Principles Art. XXIV, FTAs and the VBTA WTO Accession,4,I. Introduction, contd.,Doha Development Round Rules of Origin and Customs Issues Trade in Agricultural Products Textiles and Clothing Trade Remedies

4、Dumping, Subsides, Safeguards WTO Dispute Settlement,5,I. Introduction, contd.,Intellectual Property Trade in Services Standards and Phytosanitary Measures TRIMS Developing Countries and World Trade,6,II. GATT and the WTO,WTO, with over 146 members, became effective in 1995 WTO replaces GATT, which

5、governed world trade from 1947-1994 Marrakesh Agreement Establishing the WTO has various annexes: GATT and other trade in goods agreements General Agreement on Trade in Services TRIPS Agreement Dispute Settlement Understanding Trade Policy Review Mechanism,7,GATT/WTO, contd.,Plurilateral Agreements

6、(government contracts, civil aircraft, bovine meat, dairy products) All but Plurilateral Agreement are mandatory for all WTO Members WTO is an international organization Voting in theory may be by 2/3 vote, but in practice all decisions are by consensus,8,III. Core GATT Principles,Unconditional Most

7、 Favored Nation Treatment (Art. I) Tariff Bindings (limit on tariff levels on product by product basis) (Art. II) Non-discrimination with regard to internal taxes and rules, regulations, etc. (Art. III),9,III. Core Principles, contd.,Requirement of transparency for trade-related laws, regulations, r

8、ulings, etc. (Art. X) Prohibition against most quantitative restrictions (quotas) (Art. XI),10,IV. Exceptions,Balance of payments problems (Arts. XII, XVIII) Special treatment of developing nations General exceptions (Art. XX) Protection of public morals Necessary to protect human, animal or plant l

9、ife or health Relating to trade in gold or silver,11,IV. Exceptions, contd.,Compliance with customs, competition, intellectual property and fair trade laws Products of prison labor Protection of national treasures of historical or archeological value Conservation of exhaustible natural resources Obl

10、igations under commodity agreements,12,IV. Exceptions, contd.,Art. XX “chapeau” limits use of exceptions to situations where there is no arbitrary or unjustifiable discrimination or disguised restriction on international trade.,13,IV. Exceptions, contd.,Actions a Member “considers necessary for the

11、protection of its national security interests.” (Art. XXI),14,V. FTAs, Customs Unions and RTAs,Exception to MFN and other GATT obligations for FTAs and Customs Unions (Art. XXIV), with conditions: Covers substantially all trade among members Elimination of barriers within a reasonable payment of tim

12、e No increase in tariff or non-tariff barriers for non-members,15,V. FTAs, contd.,Regional Trade Agreements (RTAs) have proliferated nearly 300 notified to WTO US, Mexico, Canada, EU, now Japan and Korea, among those concluding RTAs ASEAN AFTA NAFTA North America,16,V. FTAs, contd.,VBTA is not a “fr

13、ee” trade agreement, but contains some of same elements involving not only trade, but investment, services, transparency, business facilitation, safeguards VBTA requires important changes in Vietnamese legal system, courts, regulatory process, etc.,17,VI. WTO Accession,WTO Rules permit any Member wh

14、o wishes to negotiate bilateral agreement with prospective members Most favorable results of those agreements combined in a single WTO accession agreement Two thirds majority vote required for new members, but to date all accepted by consensus,18,VI. WTO Accession,US, EU, Korea, Japan, China, Austra

15、lia, etc. realize Vietnam will be a major world trader, and thus are seeking many market-opening concessions Bilateral agreements have been reached to date only with Cuba; nearly 20 more remain,19,VI. WTO Accession,In June, Vietnam significantly improved its accession offer: Average bound tariff red

16、uced from 22% to 18% Greater services market-opening Reduction in tariff rate quotas and other exceptions If all goes well, Vietnam could become a WTO Member during 2005,20,VII. Doha Development Agenda,Efforts to Initiate new Round failed in Seattle in 1999, due to concerns of developing members and

17、 indecision in US and EU Doha round launched in November 1999, but progress to date has been minimal,21,VII. Doha, contd.,Impasse at Cancun based on following still unresolved issues: Inclusion of Singapore Issues (investment, competition, transparency in government procurement, trade facilitation)

18、Agricultural production and export subsidies Agricultural market access Extent to which developing countries will be expected to make new commitments,22,VII. Doha, contd.,“Group of 20” led by Brazil, India, now exercises considerable leadership over many developing countries; unclear whether G-20 wi

19、ll be an effective negotiating force or simply a bar to further progress,23,VII. Doha, contd.,US presidential election, changes in EU Commission (November) and recent accession of 25 new EU members (May) make progress in Doha negotiations unlikely before mid-2005,24,VIII. Rules of Origin/Customs,Eve

20、ntual WTO Agreement on Non-Preferential rules will likely use the tariff-shift approach In substance this is similar to U.S. principle of “substantial transformation” Uniformity in R/O important to facilitate world trade,25,VIII. R/O, Customs, contd.,Preferential rules as in NAFTA and AFTA may use s

21、everal approaches Tariff shift Wholly produced locally Local content (50% - 60% in NAFTA, 40% AFTA) Specific component, e.g., color TV picture tube,26,VIII. R/O, Customs, contd.,Harmonized System, used by US, Vietnam and most other nations, provides uniformity of classification for more than 5,000 s

22、ix digit commodity groups Uniformity facilitates trade and collection of customs duties,27,IX. Agricultural Trade,Farmers are protected in every nation; highest levels of protection are in EU, US and Japan, but are also found in China, Brazil, India and Mexico, among others GATT 1947 contained many

23、exceptions for agriculture, and did not effectively regulate agricultural product trade,28,IX. Agricultural Trade, Contd.,Agreement on Agriculture reduces but does not eliminate agriculture subsidies Green box (non-distorting) subsidies arent significantly restricted Blue Box (less-trade-distorting)

24、 direct payments not tied to production less restricted Amber Box (most restricting) tied to production, are reduced Export subsidies are significantly limited,29,IX. Agricultural Trade, Contd.,After expiration of “Peace Clause,” agricultural subsidies are now restricted under SCM Agreement Agricult

25、ural subsidies prohibited if they exceed Members commitments under AoA Otherwise, actionable under SCM Agreement only if adverse effects are shown.,30,X. Textiles and Clothing,For many decades, under Multi-Fiber Agreement, developed countries have imposed quotas on textiles and apparel from developi

26、ng nations Under ATC, all such quotas will have been phased out as of January 1, 2005, although high tariffs may remain,31,X. Textiles/Clothing, contd.,Although ATC strongly supported by country Members during Uruguay Round, many are now concerned Since China, India and a few other large producers a

27、re no longer subject to quotas, and are highly efficient producers, smaller, less efficient producers may not be able to compete.,32,X. Textiles/Clothing, contd.,Problem is particularly serious for small producers in Caribbean, Central America and Sub-Saharan Africa Vietnam remains subject to U.S. q

28、uotas until she becomes a member of WTO, adversely affecting competitive position in world textile market,33,XI. Trade Remedies - Safeguards,GATT, Art. XIX contains “escape clause” permitting reimposition of tariffs or quotas as a result of increasing imports causing serious injury to domestic produ

29、cers Such language found in GATT 1947 and most other trade agreements,34,XI. Safeguards, contd.,Another requirement is “unforeseen circumstances,” unexpected surges as a result of tariff concessions, which is difficult to prove. WTO Agreement on Safeguards provides detailed procedural and substantiv

30、e requirements for initiation of safeguard measures,35,XI. Safeguards, contd.,Many countries, such as US, exempt FTA partners from global safeguards, although WTO Appellate Body has made this very difficult. Developing country exports are exempted if a country represents under 3% of total exports, o

31、r developing countries in the aggregate, under 9%,36,XI. Safeguards, contd.,US Steel Safeguards confirmed that only increased imports throughout the period of investigation would be sufficient justification for safeguards. FTA members who were major producers Mexico and Canada could not be excluded

32、if their imports were covered in the investigation,37,XI. Safeguards, contd.,Difficulties with regard to showing that imports were cause of serious injury, FTA issues, unforeseen circumstances, makes a WTO legal safeguards action by Member nations unlikely. U.S. has special safeguards for “market di

33、sruption” for NMEs; lower standard,38,XII. Trade Remedies - Dumping,Dumping most common of trade remedies; over 100 WTO Members have AD laws, as does Vietnam Most common users are US, India, EU, Australia and Argentina To impose AD duty, domestic industry needs to show dumping, and material injury,3

34、9,XII. Dumping, contd.,WTO AD Agreement defines dumping as price discrimination between foreign and domestic markets More logical focus on sales below production cost, or predatory pricing, is not used AD laws best seen as a safety valve for freer trade worldwide,40,XII. Dumping, contd.,Normal Value

35、 (NV) (usually price in home market) compared to Export Price (EP) If EP is lower than NV, difference is dumping margin, with de minimis level of 2% AD Agreement provides detailed procedural protections and substantive rules for national investigating authorities,41,XII. Dumping, contd.,Under AD Agr

36、eement and national laws, various adjustments are to be made to NV and EP so as to provide a “fair comparison.” Adjustment for freight, circumstances of sale, differences in merchandise are designed to result in a fair comparison at the “ex factory” level,42,XII. Dumping, contd.,Non-Market economy c

37、ountries, such as Vietnam and China, are treated differently US, EU assume that various materials and production costs (input data) are not set by market forces, but through government decisions, and are therefore untrustworthy,43,XII. Dumping, contd.,Instead, Commerce (or the Commission) uses a “su

38、rrogate,” normally a market economy country such as India or Bangladesh that is a significant producer of the product, and is at a similar level of development In theory this seems reasonable, but the lack of detailed public data from producers in the surrogate country permit Commerce to make many a

39、ssumptions or adjustments that may be adverse to NME country producers.,44,XII. Dumping, contd.,China, in its Accession Agreement with the United States, accepted the concept of NME treatment for 15 years! US and China had recent discussions as to how China can become a market economy for AD purpose

40、s (like Russia) but it likely will take many years to change,45,XII. Dumping, contd.,Commerce initially determined that Vietnam would be given NME treatment as part of Basa/Catfish, based on: Government intervention in economy Non-convertibility of dong Controls on foreign investment and investors U

41、se of government pricing committees Discriminatory treatment of SOEs Restrictions on private land ownership Weak rule of law,46,XII. Dumping, contd.,While the surrogate approach is used for NV, Vietnamese (and most Chinese), exporters have been given “separate rates” for determining EP This is based

42、 on Commerce determination that the exporters determine selling prices without government direction or interference.,47,XII. Dumping, contd.,In BASA/Catfish, Commerce used input data from India and Bangladesh, and found margins of approximately 36-64% The US International Trade Commission found mate

43、rial injury, based on the significant increases in Vietnamese imports over three years, and lower prices in the U.S. market,48,XII. Dumping, contd.,While small producer countries are exempt from AD injury findings if they have imports which are less than 3% individually or less than 7% in the aggreg

44、ate (Art. 5.8), Vietnam was responsible for a far larger share of total U.S. imports.,49,XII. Dumping, contd.,In Shrimp, Commerce found preliminary AD margins of 12.11% to 19.60% for most Vietnamese producers, although a group of others received 93.13% margins A Bangladeshi company was used as the s

45、urrogate for most input prices,50,XII. Dumping, contd.,Final AD determination could result in higher or lower margins, after verification in Vietnam and a hearing in Washington If final AD margins are found, likely that USITC will find material injury, as Vietnam source imports (and those from five

46、others, China, Brazil, Ecuador, India, Thailand) are rapidly increasing, while the U.S. domestic producer market share is decreasing.,51,XIII. Trade Remedies Subsidies,US doesnt bring countervailing duty (CVD) actions against NMEs US may nevertheless bring WTO actions against Vietnam (once Vietnam i

47、s a member) in WTO DSB against Vietnams prohibited or actionable subsides under Parts II and III of SCM Agreement,52,XIII. Subsidies,Subsidy defined (Art. 1 of SCM Agreement) as financial contribution that confers a benefit on recipient Actionable or “yellow light” subsidies are domestic subsidies t

48、hat are “specific” and cause injury, “nullification or impairment” or serious prejudice. (Arts. 5,6),53,XIII. Subsidies,Export (“Red Light”) subsidies are prohibited under Art. 3 except for least developed developing countries. Certain subsidies (Art. 8) were from 1995-2000 specifically excluded; “G

49、reen Light” subsidies were certain environmental, regional and R about 2/3 of cases go to AB AB is standing group of seven members chosen for four year (once renewable) terms AB decisions are usually based on strict textual reading of covered agreements, following VCLT Arts. 31-32 for interpretation

50、,60,XIV. WTO Disputes, contd.,AB process almost always concluded in 3 months DSB normally adopts decision within a month or less Thus, total DSB process takes 16-20 months in normal circumstances,61,XIV. WTO Disputes, contd.,Losing Member has three choices: Comply with DSB decision (recommended) Neg

51、otiate compensation with prevailing party Accept retaliation (trade sanctions through higher tariffs) from prevailing Member, as approved by DSB,62,XIV. WTO Disputes, contd.,Implementation has been the rule, but there have been exceptions resulting in trade sanctions: EU Growth Hormones EU Bananas U

52、S 1916 Antidumping Act US Byrd Amendment US Foreign Sales Corporations,63,XIV. WTO Disputes, contd.,Problems with DSB include: Difficulties for small countries to use trade sanctions against large countries Lack of transparency of panel/AB process Costs of litigation before DSB Treatment of non-memb

53、er (NGO) briefs Inability of WTO Members to effectively supervise AB because of consensus voting requirements,64,XV. Intellectual Property,TRIPS Agreement is comprehensive treatment of IP issues TRIPS initially was favored by developed nations, who are highly competitive in high technology exports T

54、RIPS opposed by developing world, due to enforcement problems and concerns over pharmaceutical products,65,XV. TRIPS, contd.,Major elements of TRIPS: National treatment Obligatory accession to IP treaties Minimum standards for registration of patents, trademarks, etc. Minimum standards for local enf

55、orcement against piracy, including criminal penalties Binding WTO dispute settlement,66,XV. TRIPS, contd.,Developing countries received special grace periods for TRIPS implementation: Until 2000 for most developing countries Until 2005 for least developed countries,67,XV. TRIPS, contd.,US 301 and Sp

56、ecial 301 remedies used largely against IP violations arguably arent really necessary now US has option of seeking enforcement of IP/TRIPS rules in DSB, and imposing sanctions if responding Member does not comply For not WTO members, such as Vietnam, Section 301 actions are a serious risk,68,XV. TRI

57、PS, contd.,Section 337 mechanism used to bar entry of goods to US that violate a US patent still under use Law requires an extensive and costly administrative proceeding before USITC Prevailing party can obtain exclusion order, or cease and desist order,69,XVI. General Agreement on Trade in Services

58、,Objective of GATS is to apply GATT principles for trade in goods to trade in services Area is of major importance to US, EU, Japan, Canada, because they are more competitive in services worldwide than in manufacturing.,70,XVI. GATS, contd.,GATS has broad but not universal coverage: MFN treatment is

59、 complete Transparency is required National treatment depends on individual Member schedules Degree of market access can be limited in schedules, e.g., 49% ownership for foreign banks,71,XVI. GATS, contd.,Financial services negotiations completed in Dec. 1997; 104 Members made at least some market opening commitments, representing 95% of trade in financial services Commitments generally reduce regulatory requirements, grandfather existing operations,72,XVI. GATS, contd.,US GATS obligations are incor