Business Law environment essay
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Ch10Ppt20111.pptxCHAPTER 10 Laws Governing Access to Foreign Markets
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The General Principle of Least Restrictive Trade
WTO mandates a balancing test: weigh protecting public against restrictions on trade.
See the Thailand: Restrictions on Importation of Cigarettes case (WTO 1990). Thailand's restrictions on imports of cigarettes contravened GATT.
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Technical Barriers to Trade
A technical regulation is a MANDATORY law/regulation affecting a product’s characteristics.
Standard is a VOLUNTARY guideline established by a private or administrative body.
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Technical Barriers to Trade
Protection of Public Health, Safety, or Welfare.
Product Testing, Inspections, and Certifications for Compliance with Product Safety, Quality, and Technical Standards and Regulations Sale.
Why Standards and Technical Regulations are Barriers to Trade.
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Technical Barriers to Trade
EU Standards and Technical Regulations.
EU efforts to reduce technical barriers to trade is critical because of the multi-national brands and consolidation of the euro.
The EU is attempting to increase its standardization through the “CE Mark”.
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Technical Barriers to Trade
Japanese Standards and Technical Regulations.
Product standards in Japan are usually based on design characteristics. U.S, in contrast, has standards of performance.
What does the “JIS” mark signify?
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Technical Barriers to Trade
Chinese Standards and Technical Regulations.
China is still socialist/communist and has a very bureaucratic regulatory framework.
Laws are administered by AQSIQ.
Standardization Administrative of China 2001. Coordinate development of standards.
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Technical Barriers to Trade
The WTO Agreement on Technical Barriers to Trade (TBT).
One of Uruguay Round agreements 1994.
Harmonization, Equivalence, and Mutual Recognition.
Conformity of Assessments.
Main Provisions of the TBT Agreement.
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Technical Barriers to Trade
The WTO Agreement on TBT (cont’d).
Harmonization, Equivalence, and Mutual Recognition.
TBT applies to all products, agricultural, industrial, and consumer goods.
See the European Communities—Measures Affecting Asbestos & Asbestos-Containing Products (2001) case. French restrictions were valid under the TBT Agreement.
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Technical Barriers to Trade
International Organization for Standardization (ISO).
International standardization makes design and building and products cheaper and trade easier.
ISO 9000- certification makes selling in Europe much easier.
ISO 14000- environmental standards.
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Import Licensing Procedures
Article XI permits a country to use licensing in a nondiscriminatory, MFN, and transparent fashion to regulate some imports.
Example: a country may want to only allow importation of health products made from sterilized materials.
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Import Licensing Procedures
GATT requires “transparency” (published materials available to all countries).
WTO Agreement on Import Licensing Procedures.
Trade Facilitation.
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Government Procurement
GATT allows exception to national treatment allowing government to favor domestic supplier.
WTO Agreement on Government Procurement applies only to those countries that signed, and applies to goods and services worth 130,000 SDR’s (US $197,000) and construction contracts over 5 million SDR’s (US $7.6 million).
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Government Procurement
WTO Agreement on Government Procurement.
Agencies Excluded from the Procurement Rules: nearly 90 U.S. agencies are excluded.
Procurement Rules.
Transparency in Procurement Procedures.
Procurement Rules: AGP reverses general WTO rules that allow government agencies to favor domestic products.
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Government Procurement
Must be Transparency in Procurement Procedures.
Administering Government Procurement Rules in the United States.
Responsibility rests with the President to revoke the waiver of “Buy America Act.”
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Trade In Services
Trade in services includes professional services (e.g., law, accounting, architecture, engineering, etc), health care, insurance, travel, and many others.
According to WTO, exports of commercial services totaled $3.3 trillion (2008).
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Trade in Services
The WTO Agreement on Trade in Financial Services.
Signed by over 100 nations.
Promotes efficiency and reduces cost.
Provides consumers with greater choice.
Recognition of Licensing and Professional Qualifications.
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Trade in Services
The WTO Agreement on Trade in Financial Services.
WTO Agreement on Trade in Financial Services.
WTO Agreement on Basic Telecommunications.
Opened telecommunication markets to foreign competitors.
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Trade in Agriculture
WTO: agricultural exports over $1.34 trillion worldwide (2008).
Some Agricultural Trade Issues in the EU and Japan.
EU Common Agricultural Policy.
Japanese Rice: A Trade Dilemma.
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Trade in Agriculture
The WTO Agreement on Agriculture (1995): began removing government intervention in farming sector.
Domestic Support Programs.
Agricultural Export Subsidies.
Making Export Markets Accessible.
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Trade in Agriculture
Sanitary and Phytosanitary Measures: Food, Animal, and Plant Safety.
A country has the right to protect human, animal and plant life but cannot be used to justify otherwise discriminatory conduct.
Codex Alimentarius: International standards for the protection of plants animals and foodstuffs.
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Trade in Agriculture
Sanitary and Phytosanitary Measures: Food, Animal, and Plant Safety (cont’d).
EC Measures Concerning Meat and Meat Products (Hormones) (1997). EC’s ban on sale of beef containing residual growth hormones violated Agreement on Sanitary and Phytosanitary Measures.
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Trade in Textiles and Clothing
History of Textile Import Regulation and Deregulation.
1974 Multifiber agreement: contained quota limits by country and product.
1994 GATT agreement on Textiles ends Quota system over 10 year period.
2005 textiles will be covered by GATT’s regular rules on safeguards &unfair trade.
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What about illegal transshipment?
Countries try to avoid quotas by shipping to a 3rd country, relabeling the goods as origination from the 3rd country, and reshipping.
Trade in Textiles and Clothing
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Other WTO “Trade Related” Agreements
Trade-Related Investment Measures.
Trade-Related Aspects of Intellectual Property Rights (TRIPS).
WTO countries agree to abide by intellectual property conventions.
Domestic and foreign IPR (intellectual property rights) treated the same, and enforcement strengthened.
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Other WTO “Trade Related” Agreements
Trade-Related Aspects of Intellectual Property Rights (TRIPS) (cont’d).
Members are bringing their laws into compliance with TRIPS.
Information Technology Agreement.
1996 WTO ITA: calls for elimination of all tariffs on computers, telecommunications, software, scientific instruments by 2005.
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Trade Sanctions and Section 301: Threat of Retaliation
Section 301 Trade Act 1974.
See the United States—Sections 301-310 of the Trade Act of 1974.
Basic Section 301.
USTR retaliates against foreign country.
Discretionary and may be imposed when USTR finds unreasonable discrimination that burdens or restricts U.S trade.
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Trade Sanctions and Section 301: Threat of Retaliation
Basic Section 301 (cont’d).
Section 301 Procedures.
Sanctions and Retaliatory Measures.
The Carousel Law: Rotating Products Subject to Retaliation.
U.S. Trade Development Act (2000) amends section 301 by requiring USTR to. . .
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Trade Sanctions and Section 301: Threat of Retaliation
The Carousel Law: Rotating Products Subject to Retaliation (cont’d).
. . . periodically review list of products subject to retaliatory action and revise them 120 days after inception, and every 180 days thereafter.
EU and some American importers object to the law.
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Trade Sanctions and Section 301: Threat of Retaliation
Special 301.
U.S. uses this law to assure that American-owned intellectual property rights (IPRs) are adequately protected in foreign countries.
Each year USTR identifies countries.
Worst offenders are tagged “priority foreign countries” which requires an investigation. USTR also maintains a “watch list.”
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Conclusion
The WTO is moving the global economy to more free and fair trade.
But, there are many countries still dealing with political instability, corruption, communism, Marxism, that find it difficult to open to free trade.
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