1. CASE 1: Spain-Tariff Treatment of Unroasted coffee

2. Facts_1. abridged When: 1980 (pre-WTO) Complainant: Brazil
Respondent: Spain
Subject: Coffee
Brazil complained against Spain’s newly applied tariff on unroasted,
and non-decaffeinated coffee.

3. Facts_2. prior background
[Former times]
Customs duty 25%  22.5% on unroasted coffee
[1975]
No customs duty on unroasted coffee (under the State-trading system)

4. Facts_3. the initiative [8 July 1979] Royal Decree No.1764/79
Effective by 1 March 1980
Marketed by private entities
Product Description
Duty Rate
Columbia mild
Free
Other mild
Unwashed Arabica
7% ad valorem
Robusta
Other

5. Facts_4. assertion of both countries
Spain
“No contracting party was obliged to retain tariff structure.”
Brazil
“The new Spain tariff regime discriminate Brazil as Brazil mainly exports unwashed Arabica & Robusta.”

6. Issues_1. focus point I. Whether they are “like product” or not
II. Is there any discrimination against Brazil

7. Issues_2. main arguments
[Spain]
No contracting party was obliged to retain either its tariff structure, or its duties, applicable to the importation of products which have not been bound
Did not agree with some past GATT cases that suggested "like products" were all the products falling within the same tariff heading

8. Issues_2. main arguments
[Spain]
Although both "mild" and "unwashed Arabica“ coffees belonged to the group of Arabica, the Spanish representative further argued that differences in quality also existed between them, as a result of climatic and growing conditions as well as methods of cultivation and above all the preparation because aroma and taste, essential features in determining trade and consumption of these products, were completely different
In the Spanish market, distinctive markets existed for the various types of unroasted coffee
THUS, the Spanish representative was of the view that such various types of coffee
could not be regarded as "like products"

9. Issues_2. main arguments
[Brazil]
Coffee was one single product, therefore, for the purpose of Article I:1 of the GATT, must be considered a "like product“
"mild" and "unwashed Arabica" coffees, both came from the same species of plant
existing differences between "groups" of coffee were essentially of an organoleptic nature (taste, aroma, body, etc.) resulting from geographical conditions and, principally, from the distinct methods of preparation of the beans

10. Issues_2. main arguments
[Brazil]
From the point of view of the consumer, virtually all coffee, either roasted or soluble, was sold in the form of blends, combining in varying proportions coffee belonging to different groups
The terms type, quality, and growth were used interchangeably to indicate specific grades of coffee was the only characterization really meaningful for trading purposes
With respect to its end use, coffee was a well determined and one single product, generally intended for drinking as a beverage.

11. Decisions
The Panel found that a contracting party had the right to introduce in its customs tariff new positions or sub‑positions as appropriate. The However, whatever the classification adopted, Article I:1 required that the same tariff treatment be applied to "like products“
 whether the various types of unroasted coffee listed in the Royal Decree 1764/79 should be regarded as "like products" within the meaning of Article I:1

12. Decisions
The panel agreed with Brazil argument, and concluded that coffee beans listed in the Spanish Customs Tariffs, should be considered as "like products" within the meaning of Article I:1
The Panel further noted that Brazil main coffee export to Spain were presently charged with higher duties. Since these were considered to be "like products", the Panel concluded that the tariff régime as presently applied by Spain was discriminatory vis‑à‑vis unroasted coffee originating in Brazil

13. Evaluation
Can the term “like product” be interpreted the same way for different cases?
Do you find the interpretation of “like product” in this case acceptable? What do you think about the Spanish market?

14. CASE II
United States – Denial of Most-Favored-Nation Treatment As To Non-Rubber Footwear From Brazil

15. 1. FACTS
1.1 INTRODUCTION
Complainant: Brazil
Respondent: United States
Third Parties: Chile, Colombia, India
Product: Non-rubber Footwear
Agreements: GATT Arts.VI; XXIII:1,2; XVI
(“Subsidies Agreements”)
Brazil complained against U.S.’ countervailing duty order on non-rubber footwear from Brazil

16. 1. FACTS 1.2 TIMELINE Consultation Requested: 7 Aug 1990
Panel Established: 3 Jun 1991
Panel Report Circulated: 13 Dec 1991
Panel Report Adopted: 19 Jun 1992

17. Customs duty 25%  22.5% on unroasted coffee
1. FACTS
1.3 BACKGROUND
[Former times]
Customs duty 25%  22.5% on unroasted coffee
[1975]
No customs duty on unroasted coffee (under the State-trading system)

18. 2. ISSUES 1. Is “injury determination” made before?
2.1 KEY ISSUES
1. Is “injury determination” made before?
II. Is it a “serious injury”?

19. 2. ISSUES BRAZIL 2.2 BRAZIL’S ARGUMENTS (1)
“U.S acted less favorably to Brazil than to other contracting parties in the implementation of the United States’ obligation under Article VI”

20. 2. ISSUES BRAZIL 2.3 BRAZIL’S ARGUMENTS (2)
No contracting party was obliged to retain either its tariff structure, or its duties, applicable to the importation of products which have not been bound
Did not agree with some past GATT cases that suggested "like products" were all the products falling within the same tariff heading

21. 2. ISSUES BRAZIL 2.4 BRAZIL’S ARGUMENTS (3)
Although both "mild" and "unwashed Arabica“ coffees belonged to the group of Arabica, the Spanish representative further argued that differences in quality also existed between them, as a result of climatic and growing conditions as well as methods of cultivation and above all the preparation because aroma and taste, essential features in determining trade and consumption of these products, were completely different
THUS, the Spanish representative was of the view that such various types of coffee
could not be regarded as "like products" 21

22. 2. ISSUES UNITED STATES 2.5 U.S.’ ARGUMENTS (1)
Coffee was one single product, therefore, for the purpose of Article I:1 of the GATT, must be considered a "like product“
"mild" and "unwashed Arabica" coffees, both came from the same species of plant
existing differences between "groups" of coffee were essentially of an organoleptic nature (taste, aroma, body, etc.) resulting from geographical conditions and, principally, from the distinct methods of preparation of the beans

23. 2. ISSUES UNITED STATES 2.6 U.S.’ ARGUMENTS (2)
From the point of view of the consumer, virtually all coffee, either roasted or soluble, was sold in the form of blends, combining in varying proportions coffee belonging to different groups
The terms type, quality, and growth were used interchangeably to indicate specific grades of coffee was the only characterization really meaningful for trading purposes

24. 2. ISSUES UNITED STATES 2.7 U.S.’ ARGUMENTS (3)
The Panel found that a contracting party had the right to introduce in its customs tariff new positions or sub‑positions as appropriate. The However, whatever the classification adopted, Article I:1 required that the same tariff treatment be applied to "like products“

25. 3. DECISIONS
3.1 DECISIONS
The Grant of this non-tariff advantage under Section 331 of the 1974 Act to duty-free products originating in a country beneficiary of the GSP programme, which advantage is denied to dutiable products originating in the territory of a Subsidies Agreement signatory, is inconsistent with the most-favored-nation provision of Article I:1 of the General Agreement.

26. 3. DECISIONS
3.2 REASONS
Can the term “like product” be interpreted the same way for different cases?
Do you find the interpretation of “like product” in this case acceptable? What do you think about the Spanish market?

27. 4. EVALUATIONS
Is Article I generally subject to the grandfather exception? What about these items incorporated into Article I from Article III?