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Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 1 Market Access: Tariffs and other Charges WTO Law V.1.

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Presentation on theme: "Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 1 Market Access: Tariffs and other Charges WTO Law V.1."— Presentation transcript:

1 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 1 Market Access: Tariffs and other Charges WTO Law V.1

2 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 2 TRADE BARRIERS 1. Tariff Barriers Tariffs and Charges 2. Non-Tariff-Barriers

3 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 3 Tariff Reduction and its impact Customs Unions and Free Trade zones Development preferences Non Tariff Barriers Agriculture? NAMA negotiations ? Tariffs go down since 1947 from average 47 % to 3.9 %

4 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 4 Function of Tariffs State incomeProtectionist tool/Currency measureBalancing against unfairness

5 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 5 Tariff Schedule of a Country - 1 Part I : Most-favoured-nation or MFN concessions, maximum tariffs to goods from other WTO members. Part I is further divided into: - Section 1A tariffs on agricultural products - Section 1B tariff quotas on agricultural products - Section II Other products Part II: Preferential concessions (tariffs relating to trade arrangements listed in GATT Article I) Part III: Concessions on non-tariff measures (NTMs) Part IV: Specific commitments on domestic support and export subsidies on agricultural products

6 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 6 Tariff Schedule of a country - 2 Tariff item number Description of the product Rate of duty Present concession established Initial Negotiation Rights (or INR, such as main suppliers of product) Concession first incorporated in a GATT Schedule INR on earlier occasions Other duties and charges For agricultural products special safeguards may also be defined

7 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 7 Harmonized System Classification Section I (Chapters 1-5, live animals and animal products); Section II (Chapters 6-14, vegetable products); Section III (Chapter 15, animal or vegetable fats and oils); Section IV (Chapters 16-24, prepared foodstuffs, beverages and spirits, tobacco); Section V (Chapters 25-27, mineral products); Section VI (Chapters 28-38, chemical products); Section VII (Chapters 39-40, plastics and rubber); Section VIII (Chapters 41-43, leather and travel goods); Section IX (Chapters 44-46, wood, charcoal, cork); Section X (Chapters 47-49, wood pulp, paper and paperboard articles); Section XI (Chapters 50-63, textiles and textile products); Section XII (Chapters 64-67, footwear, umbrellas, artificial flowers); Section XIII (Chapters 68-70, stone, cement, ceramic, glass); Section XIV (Chapter 71, pearls, precious metals); Section XV (Chapters 72-83, base metals); Section XVI (Chapters 84-85, electrical machinery); Section XVII (Chapters 86-89, vehicles, aircraft, vessels); Section XVIII (Chapters 90-92, optical instruments, clocks and watches, musical instruments); Section XIX (Chapter 93, arms and ammunition); Section XX (Chapters 94-96, furniture, toys, miscellaneous manufactured articles); Section XXI (Chapter 97, works of art, antiques).

8 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 8 Aspects of Calculating Tariffs Classification Tariff Rate Customs Valuation Origin of the Goods

9 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 9 Classification of Goods Most States: Harmonized System of the WCO H.S. Codes Regularly Revised General Rules for Interpretation Explanatory notes (authentic interpretation)

10 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 10 Tariff Rates Specific Quantity Ad Valorem Value of goods Mixed Partly Quantity Partly Volume

11 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 11 Customs Valuation 1.Transaction Value of the actual good 2.Transaction Value of identical goods 3.Transaction Value of similar goods 4.Deductive Value Method 5.Computed Value Method 6.Fall – Back Method See Art. VII GATT and the AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994 Different Methods of Calculation:

12 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 12 Origin of the Goods Last Substantial Transformation Change of Tariff Classification Value Added Manufacturing or processing operation Relevance Preferential Treatment or Trade Measures Different steps of production in different countries Possible Criteria

13 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 13 Tariff Regime in GATT Tariffication -> Elimination of NTBs (XI GATT) Reduction of Tariffs through negotiation Rounds Geneva, Annecy, Torquay, Geneva, Dillon, Kennedy, Tokyo, Uruguay, Doha (47 to 3,9 %) Changing Approaches Product-By-Product -> MFN Linear Reduction Approach -> Different Levels of reduction Harmonization Formula -> differentiated reductions Sector Approach: different formula in different sectors Result Country Schedules Part of the GATT

14 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 14 Bound Tariffs Upper Ceiling of tariff duties on specific goods (II.1 GATT) Flexible by Renegotiation Rights (XXVIII GATT) After 3 Years With INR countries or member countries having a principal supplying Interest and other substantial interests Goal: to "endeavor to maintain a general level of reciprocal and mutually advantageous concessions not less favorable to trade than that provided for in this agreement prior to such negotiations." If no agreement – unilateral action and countermeasure

15 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 15 Other Border Charges Other duties and charges (II.2 and VII GATT) No ordinary duties Administrative Services, Fees for Statistics, Security Deposits Generally a Standstill: notified in the schedule Exceptions Border Tax adjustment AD and CV Duties Commensurate Service Fees (VII.4 GATT)

16 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 16 Freedom of Transit Art. V GATT Traffic in Transit No discrimination MFN treatment No unreasonable charges, regulations and delays

17 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 17 Transparency and legal protection Art. X GATT Publication (1) In advance (2) Uniform, impartial and reasonable administration (3 a) Judicial Review (3 b, c)

18 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 18 Non-tariff Barriers (NTBs) Prohibitions and restrictions other than duties, taxes and other charges Legal or factual Potential for restrictions is sufficient Quantitative Restrictions Import Licenses Other NTBs Tariff quotas ? Import bans ? Border measures Border adjustment? Asbestos Case!

19 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 19 NTBs

20 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 20 Applicable Norms: General (GATT) General Rules XI.1, XIII GATT VIII GATT for fees and charges IX. marks of origin (see also TRIPS) Exceptions XI.2 are specific exceptions XIX, XX, XXI GATT, XXIV, XXV are general exceptions

21 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 21 Principles Prohibition of all NTBs Except for art. XI.2 If not justified under XX, XI, XXIV, XXV And not in violation of art XIII (no discriminatory application) If not covered by special rules TBT, SPS, Government Procurement Agreement, Import Licenses Agreement Agriculture: XI:2 and the Agreement on Agriculture

22 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 22 Applicable Rules: Specific Specific rules TBT SPS (see XX (b) GATT) GPA 11 Safeguards Agreement (OMAs, VERs etc.) 4.2 Agriculture Agreement Import Licensing Agreement

23 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 23 Technical Standards SPS Annex A SPS TBT (art. 1 and Annex 1) Technical Regulation Technical Standard Not covered by the SPS (art. 1.5 TBT) General Features Promoting international harmonisation (3.1 SPS, 2.4 TBT) Rebuttable Presumption in favor (2.5 TBT, 3.2 SPS Additional obligations (3.3 SPS, 2.4 TBT Notification (2.11 TBT, 7 SPS) Explanation (2.5 TBT, 5.8 SPS) Recognition of foreign standards Limite duty (4 SPS, 2.7 TBT)

24 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 24 Hierarchy of Norms The MTAs prevail over GATT 1994 (Annex I a to the WTOA) to the extent of possible conflicts SPS prevail over TBT (1.5 TBT) Important because of the difference between 3.3 SPS and 2.4 TBT

25 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 25 Divergence from international standards - SPS SPS Basis 3.1 Conformity 3.2 Divergence 3.3 Risk Assessment 5 Science and Economic factors (5.2 and 3) Actual risks Actual potential in the real world Particular type of risk Quantitative or qualitative assessment Own or foreign assessment Necessity (5.4 and 5.6) No arbitrary or unjustifiable distinctions (5.5.) Preliminary risk determination (5.7)

26 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 26 Divergence from international standards - TBT Scope of application 1.3 MFN (2.1) Necessity (2.2 and 2.3) Legitimate objective Harmonization (2.4) Divergence if international standards are ineffective or inappropriate Conformity – Rebuttable Presumption (2.5), but only duty to consider as principal constituent or fundamental principle

27 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 27 GPA Plurilateral Agreement (37 and the EU) Procurement of central and sub-central government entities Exceeding certain threshold limit values Annex 5: 5 mio SDR Supply and service: or SDR Exceptions: Security and other legitimate public concerns, see art. XXIII.2 GPA Allowed Procedures Open, non-open, limited Transparency Limited Acceptance Dispute settlement

28 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 28 GATS Market Access Rules (XVI) and other barriers Freedom to exclude Quantitative restricitions (XVI.2 a-d) Company Law (XVI.2 e) Investment Restrictions (XVI.2 f) Concessions Liberalization in the Commitments (Schedules) (XX) Application of MFN (XVI.1) Application of NT (XVII)

29 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 29 Service Schedule Four colums Sector (12 classes with 150 sub-sectors) and service mode (art. 1) Terms, limitation and conditions on market access Conditions and qualifications on national treatment Undertakings concerning additional commitments Bound, Conditionally Bound, Unbound Including intl. Transfers and Payments for services

30 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 30 Changes of Commitments Rounds of Negotiation (XIX) So far sucessful: telecommunications, financial services and only partly movement of persons Doha Round ? Modification or withdrawal (XXI GATS) Compensation Arbitration Countermeasures

31 Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 31 Other trade barriers for services Lacking transparency – see art. III Unreasonable, subjective or partisan administration – see art. VI.1 Licensing, qualification requirements and technical standards as nullification or impairment of market access commitments – see art. VI.5 (a) Non – recognition of foreign diplomas and certificates – see art. VII.1 Service monopolies – see art. VIII.1 Restrictive business practices – see art. IX Restraints of international transfers and payments for services – see art. XI Government procurement – see art. XIII.1 and the GPA as a PTA


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