HUKUM PERNIAGAAN INTERNASIONAL Topik: WTO (The Law of the WTO: GATT 1994 and GATS) Dina W. Kariodimedjo Fakultas Hukum UGM FH UGMDina W. Kariodimedjo1

Key concept: Non-discrimination Principle of the most-favoured-nation (MFN) treatment obligation Principle of the national treatment obligation FH UGMDina W. Kariodimedjo2

GATT 1994 Article I – MFN Article III - NT FH UGMDina W. Kariodimedjo3

GATS Article II – MFN Article XVII - NT FH UGMDina W. Kariodimedjo4

The MFN and NT obligations of the GATT 1994 and the GATS prohibit discrimination on the basis of ‘nationality’ or the ‘national origin or destination’ of the product, service or service supplier FH UGMDina W. Kariodimedjo5

MFN in the GATT 1994 Nature Article I:1 GATT 1994 – Covers ‘in law’ (de jure) and ‘in fact’ (de facto) discrimination FH UGMDina W. Kariodimedjo6

MFN Consistency Article I:1 GATT 1994 (#1) Test 1: Whether the measure at issue confers a trade ‘advantage’ of the kind covered by Article I:1; Test 2: Whether the products concerned are ‘like’ products; and Test 3: Whether the advantage at issue is granted ‘immediately and unconditionally’ to all like products concerned. FH UGMDina W. Kariodimedjo7

Test 1: The MFN treatment obligation concerns any ‘advantage’ granted by any Member with respect to: Custom duties, other charges on imports and exports and other customs matters; Internal taxes; and Internal regulation affecting the sale, distribution and use of products. (not only concerns advantages granted to other WTO Members, but advantages granted to all other countries –including non-WTO Members) FH UGMDina W. Kariodimedjo8

Test 2: ‘like products’ The characteristic of the products; Their end-use; and Tariff regimes of other Members. FH UGMDina W. Kariodimedjo9

Test 3: advantage granted ‘immediately and unconditionally’ Once a WTO Member has granted an advantage to imports from a country, it cannot make the granting of that an advantage to imports of other WTO Members conditional upon those other WTO Members ‘giving something in return’ or ‘paying’ for the advantage. FH UGMDina W. Kariodimedjo10

MFN in the GATS The nature of the MFN treatment obligation provided for in Article II:1 GATS The test of consistency with Article II:1 GATS The exemptions from the MFN treatment obligation of Article II:1 of the GATS FH UGMDina W. Kariodimedjo11

The nature of the MFN treatment obligation provided for in Article II:1 GATS Article II:1 prohibits discrimination between like services and service suppliers from different countries FH UGMDina W. Kariodimedjo12

MFN consistency Article II:1 GATS (#2) Test 1: Whether the measure is a measure at issue affects trade in services; Test 2: Whether the services or service suppliers concerned are ‘like’ services or services suppliers; and Test 3: Whether less favourable treatment is accorded to the services or service suppliers of a Member. FH UGMDina W. Kariodimedjo13

Test 1: Whether the measure is a measure covered by the GATS A measure by a Member; and A measure affecting trade in services FH UGMDina W. Kariodimedjo14

Test 2: Whether the services or service suppliers concerned are “like” services or services suppliers The characteristics of the service or the service supplier; The classification and description of the service in the United Nations Central Product Classification (CPC) system; and Consumer habits and preferences regarding the services or the service supplier. FH UGMDina W. Kariodimedjo15

Test 3: Whether less favourable treatment is accorded to the services or service suppliers of a Member If it modifies the conditions of competition (Article XVII) De jure and de facto discrimination FH UGMDina W. Kariodimedjo16

Exemptions from the MFN of the GATS No exemptions from the MFN of the GATT 1994 Exemptions GATS – Article II:2 GATS: – Member could list measure in the Annex on Article II Exemptions FH UGMDina W. Kariodimedjo17

NT consistency Article III:2, first sentence, GATT 1994 – Internal Taxation (#3) Test 1: Whether the measure at issue is an ‘internal tax’; Test 2: Whether the imported and domestic products are ‘like’ products; and Test 3: Whether the imported products are not taxed in excess of the domestic products. FH UGMDina W. Kariodimedjo18

NT Consistency Article III:2, second sentence, GATT Internal Taxation, a broader category of products – ‘like products’, ‘directly competitive or substituable’ (#4) Test 1: Whether the measure at issue is an ‘internal tax’; Test 2: Whether the imported and domestic products are directly competitive or substituable; Test 3: Whether these products are not similarly taxed; and Test 4: Whether the dissimilar taxation is applied so as to afford protection to domestic products. FH UGMDina W. Kariodimedjo19

NT Consistency Article III:4 GATT 1994 – Internal Regulation (#5) Test 1: Whether the measure at issue is a law, regulation or requirement covered by Article III:4; Test 2: Whether the imported and domestic products are ‘like’ products; and Test 3: Whether imported products are accorded less favourable treatment. FH UGMDina W. Kariodimedjo20

NT GATS – NT GATT NT Article XVII GATS is different from the NT Article III GATT. – NT GATS: applies only to the extent WTO Members have explicitly committed themselves to grant ‘national treatment’ in respect of specific service sectors – NT GATT: NT obligation has general application to all trade FH UGMDina W. Kariodimedjo21

NT Consistency Article XVII GATS (#6) Test 1: Whether the measure at issue affects trade in services; Test 2: Whether the foreign and domestic services or service suppliers are ‘like’ services or service suppliers; and Test 3: Whether the foreign services or service suppliers are granted treatment no less favourable. FH UGMDina W. Kariodimedjo22

The factors that must be considered in determining ‘likeness’ are, among other relevant factors: (#7) The characteristics of the products, services and service suppliers; The classification of the products, services and service suppliers; Consumer habits and preferences regarding the products, services and service suppliers; and For products, their end-use. FH UGMDina W. Kariodimedjo23

Bacaan wajib Van den Bossche, Peter, 2005, The Law and Policy of the World Trade Organization, Text, Cases and Materials, Cambridge University Press, Cambridge. Jackson. Kartadjoemena, Hassan S., Putaran Uruguay. FH UGMDina W. Kariodimedjo24

Terima Kasih FH UGMDina W. Kariodimedjo25

Case Newland – a wine drinking country Richland – a beer exporting country Customs duties: – 10% on wine – 20% on non-alcoholic beer – 30% on “A type” beers Exempted: – “A type” beers produced in the US FH UGMDina W. Kariodimedjo26