NON-DISCRIMINATION UNDER GATT94 Tariq Al –Zuhd Consultant for WTO Affairs 12 August 2004

2. Exceptions to MFN 4. Exceptions to National Treatment 1 3. National Treatment 5. Case Studies 1. Most favoured Nation (MFN)Tarde in Goods

Non-discrimination Under GATT94 1. Most-Favoured-Nation (MFN) GATT Art. I:1 Customs Duties and charges of any kind imposed on importation or exportation imposed in connection with importation or exportation imposed on the international transfer of payments for imports or exports with respect to the method of levying such duties and charges with respect to all matters referred to in paragraphs 2 and 4 of Article III (National Treatment) Coverage: any advantage, favour, privilege or immunity granted by any Member to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other Member.

GATT Art. I:1 Articles related to Exceptions to MFN GATT Art. I:2-4Historical Preferences GATT Art. IV (c)Cinematographic Films GATT Art. XXIV:3Frontier Traffic GATT Art. XXIV:5,...Regional Trade Agreements “Enabling Clause”Differential and more favourable treatment, reciprocity and fuller participation of Developing countries Marrakesh Ag. Art.IX:3Waiver Horizontal Exceptions Non-discrimination Under GATT94 2.Exceptonsto MFN

2. National Treatment GATT Art. III:1 “Members recognize that internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of Products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production “ General Principle Non-discrimination Under GATT94

2. National Treatment GATT Art. III “Any internal tax or other internal charge, or any law, regulation or requirement of the kind referred to in paragraph 1 which applies to an imported product and to the like domestic product and is collected or enforced in the case of the imported product at the time or point of importation, is nevertheless to be regarded as an internal tax or other internal charge, or a law, regulation or reuirement of the kind referred to in paragraph 1, and is accordingly subject to the provisions of Article III” Taxes or charges collected at the border (Ad. Art. III) Non-discrimination Under GATT94

3. National Treatment GATT Art. III:2 The products of the territory of any Member imported into the territory of any other Member shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products. Moreover, no Member shall otherwise apply internal taxes or other internal charges to imported or domestic products in a manner contrary to the principles set forth in paragraph 1. Tax discrimination on like or directly competitive or substitutable products Non-discrimination Under GATT94

3. National Treatment GATT Art. III:2 (Ad. Art. III:2) The products of the territory of any Member imported into the territory of any other Member shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products. Moreover, no Member shall otherwise apply internal taxes or other internal charges to imported or domestic products in a manner contrary to the principles set forth in paragraph 1. A tax conforming to the requirements of the first sentence of paragraph 2 would be considered to be inconsistent with the provisions of the second sentence only in cases where competition was involved between, on the one hand, the taxes product and, on the other hand, a directly competitive or substitutable product which was not similarly taxed. Directly competitive or substitutable products Non-discrimination Under GATT94

3. National Treatment GATT Art. III:4 The products of the territory of any Member imported into the territory of any other Member shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations, transportation, distribution or use. The provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product. Domestic regulation discriminating against like foreign products Non-discrimination Under GATT94

4. National Treatment GATT Art. III:1,2,4 Articles related to Exceptions to National Treatment GATT Art. III:3Historical Preferences GATT Art. III:8(a) Government Procurement GATT Art. III:8(b)Production subsidies GATT Art. III:9Prejudicial effect of internal maximum price control measures GATT Arts. III:10, IVCinematographic Films Marrakesh Ag. Art.IX:3Waiver Horizontal Exceptions Non-discrimination Under GATT94

Case Studies

Is a car allowed to enter UK? Yes, under the following conditions ? UK CUSTOMS UK CUSTOMS Although UK Does not produce cars it requires importers to pay 33% value added tax plus 20 per cent tariffs Importers of Cars from USA are required only to pay 15% tariffs with no value added tax Car models before 2000 are prohibited Although UK Does not produce cars it requires importers to pay 33% value added tax plus 20 per cent tariffs Importers of Cars from USA are required only to pay 15% tariffs with no value added tax Car models before 2000 are prohibited Case Study # 1

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