Business Law environment essay
farhm9
Ch9Ppt1.pptxCHAPTER 9 GATT Law and the World Trade Organization: Basic Principles
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Introduction to Trade Regulation
Trade barrier is any impediment to trade in services or goods.
Import trade barrier is any impediment, direct or indirect, to the entrance or sale of imported goods or services.
What are some of the Reasons for Regulating Imports?
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Introduction to Trade Regulation
Tariffs.
Non-tariff Barriers to Trade.
Embargoes.
Quotas.
Auctioned Quotas.
Tariff-Rate Quotas.
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Introduction to Trade Regulation
Indirect Non-tariff Barriers.
Japanese Large-Scale Retail Stores Law (now repealed).
Import Licensing Schemes and Customs Procedures as Trade Barriers.
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Introduction to Trade Regulation
Transparency.
Impact of Trade Barriers on Managerial Decisions.
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Multilateral trade negotiations- reduce tariffs and nontariff barriers (NTB).
Nondiscrimination and unconditional MFN.
National Treatment.
Eliminate quotas and NTB (convert NTB to tariffs and then reduce), transparency very critical.
The General Agreement on Tariffs and Trade
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GATT Framework.
Rules created by international agreement, become guiding principles of international trade law.
GATT and U.S. Law.
GATT does not provide individual rights and remedies to private parties.
The General Agreement on Tariffs and Trade
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GATT and U.S. Law (cont’d).
GATT Agreements as a Basis for Interpreting U.S. Trade Statutes.
Scope and Coverage of GATT 1947.
Scope and Coverage of GATT 1994.
The General Agreement on Tariffs and Trade
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WTO replaced GATT in 1995.
WTO is an umbrella organization that sets rules of international trade and dispute resolution.
Organization of the WTO
Overseen by the Ministerial Conference which appoints the Director-General.
World Trade Organization
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Ex. 9.1 Structure of the WTO
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GATT/WTO Dispute-Settlement Procedures
WTO Dispute-Settlement Procedures.
Dispute mechanisms and procedures attempt to avoid retaliation or “trade wars.”
Have quasi-judicial process for resolving disputes when deadlocked.
Only a government can bring a “complaint” against another government.
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GATT/WTO Dispute-Settlement Procedures
WTO Dispute-Settlement Procedures (cont’d).
See the European Communities-Regime for the Importation, Sale, and Distribution of Bananas case (1997). U.S. could call for the convening of a WTO panel to question European Community import barriers.
WTO Reports as Legal Precedent.
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GATT 1994: Major Principles of Trade Law
GATT reinforces five principles:
Multilateral trade negotiations.
Predictability of trade opportunities.
Non-discrimination and unconditional MFN.
National treatment.
Elimination of quotas and other non-tariff barriers.
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GATT 1994: Major Principles of Trade Law
Multilateral Trade Negotiations.
The Kennedy Round.
The Tokyo Round.
The Uruguay Round.
The Doha Round (failure of two meetings in Seattle 1999, and Cancun 2003).
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GATT 1994: Major Principles of Trade Law
Tarrification.
Process by which quotas, licensing schemes, and other non-tariff barriers to trade are “converted” to tariffs.
Tariff Concessions, Bound Rates, and Tariff Schedules.
Article II of GATT calls for member nations to cooperate in lowering tariffs.
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GATT 1994: Major Principles of Trade Law
Tariff Concessions, Bound Rates, and Tariff Schedules (cont’d).
Tariff bindings are capped at agreed rate and published in tariff schedules.
See the GATT European Economic Community---Import Regime for Bananas (1995). EEC had deprived complaining Latin American countries of benefits under bound tariff schedules.
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Nondiscrimination, MFN, and National Treatment
Most Favored Nation (MFN) Trade.
Agreement to treat products (or services) from that country with lowest tariff rates that it gives to similar products imported from its other MFN trading partners.
In U.S., MFN granted by Congress.
According to WTO, all member nations are entitled to MFN status.
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Nondiscrimination, MFN, and National Treatment
Most Favored Nation (cont’d).
Unconditional MFN: if a member extends privilege to another member then that privilege automatically is extended to all members.
Exceptions to MFN Trading Status.
New Terminology: MFN is now Normal Trade Relations or NTR.
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Nondiscrimination, MFN, and National Treatment
Most Favored Nation (cont’d).
NTR Status and Jackson-Vanik: Remnant of the Cold War.
Normalization of U.S. Trade Relations with Russia.
Normalization of U.S. Trade Relations with Vietnam.
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Nondiscrimination, MFN, and National Treatment
Most Favored Nation (cont’d).
Normalization of U.S. Trade relations with China.
1994 Clinton delinked human rights and trade for China’s annual renewal of MFN.
2000 Congress granted permanent normal trade status to China effective upon China’s admission to WTO.
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Nondiscrimination, MFN, and National Treatment
Most Favored Nation (cont’d).
Issues Affecting U.S.-China Trade.
North Korea.
Tibet.
Chinese corporate espionage against U.S.
U.S. is pressuring China to allow its currency (yuan) to rise, but this could trigger ‘currency wars.’
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National Treatment
National Treatment provisions in GATT are intended to ensure that imported products will not be subject to discriminatory treatment under the laws of the importing nation.
See the Japan Taxes on Alcoholic Beverages- 1996 WTO. Japan’s tax policy violated GATT provisions regarding national treatment.
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GATT and the Elimination of Quotas
GATT permits tariffs to regulate imports but not quotas or other quantitative restrictions.
Quantitative Restrictions: Balance of Payments Exception and Developing Countries.
Balance of Payments deficit.
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GATT and the Elimination of Quotas
Quantitative Restrictions: Balance of Payments Exception and Developing Countries.
See the India—Quantitative Restrictions on Imports of Agricultural, Textile, & Industrial Products (1999) case. U.S. challenged India’s restrictions, and WTO panel found they were not necessary.
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Conclusion
Trade is often a political football in the United States and other countries.
When U.S. approved GATT agreement also passed a bill to review WTO every 6 months.
Fears of “multilateralism”- why is that a “dirty word” to some?
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Conclusion
Conflict between international and national law.
Law vs. politics.
What is the appropriate connection between human rights and trade? European and Japanese model vs. United States’ historical approach?
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Conclusion
Should labor and environmental issues be linked to trade?
Furthers whose agenda?
Is it protectionism in disguise?
Conflict between the developing and developed world?
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