univ. - prof. dr. werner meng, europa institut, saarland university, germany 1 market access:...
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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
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 2
TRADE BARRIERS
1.
•Tariff Barriers
•Tariffs and Charges
2.
•Non-Tariff-Barriers
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 negotiati
ons ?Tariffs go down since 1947 from average 47 % to
3.9 %
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 4
Function of Tariffs
State income
Protectionist tool/Currency measure
Balancing against unfairness
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 5
Tariff Schedule of a Country - 1Part 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
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 6
Tariff Schedule of a country - 2
Tariff item numberDescription of the productRate of dutyPresent concession establishedInitial Negotiation Rights (or INR, such as main suppliers of product)Concession first incorporated in a GATT ScheduleINR on earlier occasionsOther duties and chargesFor agricultural products special safeguards may also be defined
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).
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 8
Aspects of Calculating Tariffs
Classification• Tariff Rate
Customs Valuation• Origin of the Goods
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 9
Classification of Goods
Most States: Harmonized System of the WCO
H.S. CodesRegularly RevisedGeneral Rules for InterpretationExplanatory notes (authentic interpretation)
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
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 11
Customs Valuation
1.Transaction Value of the actual good2.Transaction Value of identical goods3.Transaction Value of similar goods4.Deductive Value Method5.Computed Value Method6.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:
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 12
Origin of the Goods
Last Substantial TransformationChange of Tariff Classification
Value Added
Manufacturing or processing operation
Relevance• Preferential Treatment or Trade Measures• Different steps of production in different
countries
• Possible Criteria
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 13
Tariff Regime in GATTTariffication -> 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 ApproachesProduct-By-Product -> MFNLinear Reduction Approach -> Different Levels of reductionHarmonization Formula -> differentiated reductionsSector Approach: different formula in different sectors
ResultCountry Schedules
Part of the GATT
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 14
Bound TariffsUpper Ceiling of tariff duties on specific goods (II.1 GATT)Flexible by Renegotiation Rights (XXVIII GATT)
After 3 YearsWith 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
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 dutiesAdministrative Services, Fees for Statistics, Security Deposits
Generally a Standstill: notified in the scheduleExceptions
Border Tax adjustmentAD and CV DutiesCommensurate Service Fees (VII.4 GATT)
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 16
Freedom of Transit
Art. V GATTTraffic in TransitNo discriminationMFN treatmentNo unreasonable charges, regulations and delays
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 17
Transparency and legal protection
Art. X GATTPublication (1)
In advance (2)Uniform, impartial and reasonable administration (3 a)Judicial Review (3 b, c)
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 factualPotential for restrictions is sufficient
Quantitative RestrictionsImport LicensesOther NTBs
Tariff quotas ?Import bans ?
Border measuresBorder adjustment? Asbestos Case!
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 19
NTBs
B o rd er M e asu res
Q uo ta Im po rt/ E xpo rt B a ns
Q R s
M a x im u m /M in im um P rices
Im p ort L ice n ses
P re sh ip m e n t I
C u s to m s Fo rm a lit ies
O th e r N T B s
N o n -T a riff B a rrie rs
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 20
Applicable Norms: General (GATT)
General RulesXI.1, XIII GATT
VIII GATT for fees and chargesIX. marks of origin (see also 22-24 TRIPS)
ExceptionsXI.2 are specific exceptionsXIX, XX, XXI GATT, XXIV, XXV are general exceptions
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 21
Principles
Prohibition of all NTBsExcept for art. XI.2
If not justified under XX, XI, XXIV, XXVAnd not in violation of art XIII (no discriminatory application)If not covered by special rules
TBT, SPS, Government Procurement Agreement, Import Licenses AgreementAgriculture: XI:2 and the Agreement on Agriculture
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 22
Applicable Rules: Specific
Specific rulesTBTSPS (see XX (b) GATT)GPA11 Safeguards Agreement (OMAs, VERs etc.)4.2 Agriculture AgreementImport Licensing Agreement
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 23
Technical Standards
SPSAnnex A SPS
TBT (art. 1 and Annex 1)Technical Regulation Technical StandardNot covered by the SPS (art. 1.5 TBT)
General FeaturesPromoting international harmonisation (3.1 SPS, 2.4 TBT)Rebuttable Presumption in favor (2.5 TBT, 3.2 SPSAdditional obligations (3.3 SPS, 2.4 TBTNotification (2.11 TBT, 7 SPS)Explanation (2.5 TBT, 5.8 SPS)
Recognition of foreign standardsLimite duty (4 SPS, 2.7 TBT)
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 conflictsSPS prevail over TBT (1.5 TBT)
Important because of the difference between 3.3 SPS and 2.4 TBT
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 25
Divergence from international standards - SPS
SPSBasis 3.1Conformity 3.2Divergence 3.3
Risk Assessment 5Science 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)
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 26
Divergence from international standards - TBT
Scope of application 1.3MFN (2.1)Necessity (2.2 and 2.3)
Legitimate objective
Harmonization (2.4)Divergence if international standards are ineffective or inappropriateConformity – Rebuttable Presumption (2.5), but only duty to consider as principal constituent or fundamental principle
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 entitiesExceeding certain threshold limit values
Annex 5: 5 mio SDRSupply and service: 400.000 or 200.000 SDR
Exceptions: Security and other legitimate public concerns, see art. XXIII.2 GPAAllowed Procedures
Open, non-open, limited
TransparencyLimited AcceptanceDispute settlement
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 28
GATS
Market Access Rules (XVI) and other barriersFreedom to exclude
Quantitative restricitions (XVI.2 a-d)Company Law (XVI.2 e)Investment Restrictions (XVI.2 f)
ConcessionsLiberalization in the Commitments (Schedules) (XX)Application of MFN (XVI.1)Application of NT (XVII)
Univ. - Prof. Dr. Werner Meng, Europa Institut, Saarland University, Germany 29
Service Schedule
Four columsSector (12 classes with 150 sub-sectors) and service mode (art. 1)Terms, limitation and conditions on market accessConditions and qualifications on national treatmentUndertakings concerning additional commitments
Bound, Conditionally Bound, UnboundIncluding intl. Transfers and Payments for services
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 personsDoha Round ?
Modification or withdrawal (XXI GATS)CompensationArbitration Countermeasures
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.1Service monopolies – see art. VIII.1Restrictive business practices – see art. IXRestraints of international transfers and payments for services – see art. XIGovernment procurement – see art. XIII.1 and the GPA as a PTA