World Trade Law

Dr.
Tabrez Ahmad
Associate Professor of Law
www.technolexindia.com
tabrezahmad7@gmail.com
technolexindia.blogspot.com
04/20/11 www.technolexindia.com, http://technolexindia.blogspot.com 2
Agenda

 What is WTO
 Tariff and non-tariff barriers
 What is meant by DUMPING ?
 How is dumping measured ?
 The role of material injury and de-menimis in AD
 The steps in an AD investigation and duty imposition
 A brief history of AD
 Various minuses of the AD measurement laws.
 AD Duties and their IMPACT.
 Increasing use of AD in WTO
 Top 10 users of AD in the world.
 Subsidies and countervailing measures
 Principles of Non-discrimination under WTO
 GATT Exceptions
 Case study
 Conclusions & Recommendations

I 04/20/11 www.technolexindia.com, http://technolexindia.blogspot.com 3
Members (148)
Applied Countries
(28)
WTO Members
WTO-AoA NEGOTIATIONS
CREATING WEALTH FROM

FARM GATE TO FOOD PLATE
GENESIS
WTO Came into existence on 1-1-1995with the

conclusion of Uruguay Round Multilateral Trade
Negotiations at Marrakesh on 15th April 1994, to :

Provide common institutional framework for

conduct of trade relations among members

Facilitate the implementation, administration
and operation of Multilateral Trade
Agreements

Lay down Rules and Procedures Governing
Dispute Settlement

Provide Trade Policy Review Mechanism

T T
A
G
TO
W
Difference between GATT & WTO
GATT WTO
GATT was ad hoc and WTO and its agreements are
provisional
GATT had contracting parties permanent.
WTO has member countries
GATT system allowed existing WTO does not permit this.
domestic legislation to continue
even if it violated a GATT
GATT was less powerful, dispute WTO is more powerful, dispute
settlement .system was slow and settlement mechanism is fast
agreement
less efficient. Its ruling could be and more efficient. It is very
easily blocked. difficult to block the rulings.
OBJECTIVES
Raising Standards of living
Marrakesh Agreement establishing the WTO
Ensuring full employment
Ensuring large and steadily growing volume of real income

and effective demand
Expanding the production of and trade in goods and

services , while allowing for the optimal use of the world ’ s
resources ( sustainable development )
… seeking both to protect and preserve the environment

and to enhance the means for doing so in a a manner
consistent with their ( the Parties to the Agreement )
respective needs and concerns at different levels of
economic development .

FUNCTIONS (1)
Framework to facilitate the implementation , administration
and operation of WTO Agreements
Framework to further the objectives of the WTO Agreements
Forum for negotiations in matters dealt with under the WTO

Agreements

FUNCTIONS (2)
Forum for further negotiations ( new rules and disciplines )
Framework to facilitate the implementation , administration

and operation of new agreements

FUNCTIONS (3)
Framework to administer the Understanding on Rules and
Procedures Governing the Settlement of Dispute ( DSU )
Framework to administer the Trade Policy Review Mechanism

( TPRM )

MINISTERIAL CONFERENCE
GENERAL COUNCIL
PLURILATERAL
INTELLECTUAL
AGREEMENTS
HORIZONTAL
PROPERTY
SERVICES
GOODS
ISSUES
MEMBERS
OBSERVERS
SECRETARIAT

The WTO Principles
Transparenc
Environment y
Protection MFN
Treatment
Competition
On BoP
National
Princi Treatment
ples
Treatment Of
For LDCs WTO
Rule Based Free

Trading Trade
System Principle
Dismantling
Trade
Barriers

Background: Period between the First and Second World
Wars:
q– 1920s: Attempt to organize world trade on a liberal
basis.
q– at the beginning of the 1930s, the monetary system
broke down
q– Reciprocal Trade Agreements and trade restrictions
were introduced
q– Many countries retreated towards an autarkic pattern of
production
France Germany Spain Italy USA

1913 20% 13% 41% 18% 44%
1925 21% 20% 41% 22% 37%
1931 30% 21% 63% 46% 48%
Table: Average tariff rates in selected countries on manufactured
products
Period following the Second World War (WW II):
1– Memories of the pre-war period: economic reason as

major cause from World War-II
• High reparations from WW I
• High inflation rate
• High unemployment rate
2– Victorious countries (US, Britain) were determined to

learn from mistakes:
• Economic success
• Strong trade relation
• Economic interdependency

Bretton Woods conference (1944) as starting point for a new
order of then world economy with the cornerstones:
üInternational Monetary Fund (IMF)
üInternational Bank for Reconstruction and Development
(IBRD)
üInternational Trade Organization (ITO)
• IMF was designed to take care of short term problems in

connection with international liquidity
• IBRD is one of 5 institutions that comprise the World Bank
Group
• During negotiations on the ITO in 1946, some countries saw a
need for immediate tariff reductions :-
ØUS took the initiative in preparing a document on a
“general agreement on tariffs and trade”
ØSubsequent negotiations in Geneva between a group
of 23 countries resulted in a set of mutual tariff
reductions (GATT)
www.technolexindia.com, http://technolexindia.blogspot.com 17
1. Foundation of the GATT
The GATT was signed by its 23 founding members on 30
October 1947 and entered into force on 1 January 1948
23 Founding member countries of the GATT:

United States, Canada, Cuba, Brazil,
Chile, Australia, New Zealand, China,
India, Myanmar, Sri Lanka, Pakistan,
Syria, Lebanon, South Africa, Zimbabwe, United
Kingdom, France, Belgium, Luxembourg, Netherlands,
Norway, Czechoslovakia
GATT was introduced as a stepping stone towards

the establishment of the ITO and embodied many principles of
the proposed ITO.

Conference in Havana (1947/48):
1.What should be the authority of the proposed ITO?
2.Disagreement between the US and the UK prevented the
ratification of the charter by the US
That is why ITO never came into existence and GATT was
left as the framework for trade relations (though it was a
less ambitious organization than would have been the ITO)

2. Geneva Round (1947)
Time- April 1947 – October1947
Duration – 7 months
Countries – 23
Negotiations in this and the succeeding 4 Rounds were on a
bilateral basis -: “product-by-product, request-offer”
• members completed 123 negotiations and established 20
schedules containing the tariff reductions. which became an
integral part of GATT.
• The Agreement covered some 45,000 tariff concessions and
about $10 billion in trade.
• First Round was successful since the US was ..
– enthusiastic for free trade
– was willing to cut its tariffs on imports from Europe
– did not put pressure on European countries to abandon their
trade restrictions

Development of average tariffs in the US from 1865-
1967
Geneva round

3. Annecy Round (1949)
Time- April 1949 – August1949
Countries –Accession of ten more country (From 23 to 33 )
Denmark, Finland, Sweden, Greece,
Nicaragua, Uruguay Haiti, Liberia, Dominican
Republic, Italy,
§All Members negotiated an additional 13,000 tariff
reductions from last round.
§Agreement that the accession of a new member country
does only two-third majority of all existing member countries
§If a member votes again accession it does not need to
extend trade policy concessions to this country
Denmark N.land USA France Austria UK Italy Germany
1950 3% 11% 14% 18% 18% 23% 25% 26%
Table: Average tariff rates in selected countries on

manufactured products 22
4. Torquay Round (1950/51)
Time- September 1950 – April1951
Countries– Accession of five more countries (33+5 = 38)
Austria, Germany, Turkey, Philippines, Peru
• Participants completed some 500 negotiations
• Additional tariff reductions emerging from these
negotiations were modest: Negotiations were not considered
to be a “success“
• Major problem of that Round: Dispute between the US and
the UK “no bilateral tariff cuts on US—UK trade”
• Contracting parties exchanged some 8,700 tariff reductions
of about 25% in relation to the 1948 level.
• During the Torquay Round, the US indicated that the ITO
Charter would not be re-submitted to the US Congress: End
of ITO.
5. Geneva Round (1955/56)
Time- January 1956 – May 1956
From 1951 to 1955, GATT membership increased by only
one country on net, with the withdrawal of Libeia being
balanced by the accession of Japan
• The momentum toward lower tariffs was lost
• Important factor behind the passivity during this period:
Growing protectionism in the US (Feeling that the US had
given away concessions, while European countries were
reluctant in eliminating their trade barriers)
• Low-tariff countries were frustrated by their inability to
bargain effectively with high-tariff countries.
• Fourth Round produced similarly not sufficient results
($2.5 billion worth of tariff reductions)
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6. Dillon Round (1960-62)
Time - September 1960 – July 1962
Background (late 50s): Average tariff rates differed sharply
within the European Economic Community (EEC), ranging
from 6% for Germany to 19% for Italy:
Table: Average tariff rates in European countries on manufactured
productsDenmark N.land France Austria UK Italy Germany
1950 3% 11% 18% 18% 23% 25% 26%
1958 6% 10% 17% 15% 17% 19% 6%
The Round was divided into two phases:

– First phase was concerned for negotiations with EEC member
states for the creation of a single schedule of concessions for the
EEC based on its Common External Tariff (CET)
– Second phase was a further general round of tariff negotiations
25
• Round resulted in 4,400 tariff concessions covering $4.9
billion of trade.
• Last round of negotiations which were undertaken on a
bilateral basis:
I.Participants came up with lists demanding tariff
reductions from their main trading partners.
II.These list were the basis for bilateral trade negotiations.
III.The Most favored nation principle ensured that all
member countries were granted with all trade
advantages. In effect, that means no nation will be
treated worse than another.
• As a result of Dillon Round, tariff rates on manufactured
goods came down sharply (e.g. common external tariff of
the EEC fell to 10.4% in 1968)
• Agricultural and textile sectors were still not considered

7. Kennedy Round (1964-67)
Time- May 1964 – June1967
Countries – 66
•A very ambitious round. It had 4 major goals:
üTo slash tariffs by half with minimum number
of exceptions.
üTo break down farm trade restrictions.
üTo strip off non tariff regulations.
üTo aid developing nations.
The participating countries presented 80% of world
trade.
Round named after President John F Kennedy who
died the year before the round.
It aimed to increase trade between the US and the
European Economic Commission(EEC).

•The round had introduced the linear tariff reduction or
across- the-board which was a formula based approach.
Problems:
Tariff reduction in agricultural products was the main
bone of contention for US and EEC. Agriculture was by
an large left out from tariff cuts.
Disagreement on the linear tariff reductions which
resulted in agriculture being treated separately.

Achievements:
Industrial tariffs were reduced by 35 percent across the
board over a period of 5 years. Tariff concessions were
worth $40 billion of world trade.

An Anti-Dumping code was agreed upon however US
never agreed upon it so it had little practical implications.
American Selling Price had also been eliminated.
A short lived International Wheat Agreement was
intended to stabilize world wheat prices.
Large reductions in grains and chemical products.
Reduction of tariff in tropical products, primary materials
and manufactured goods of interest to the less
developed countries.
Food aid programme totaling 4.5 million tons a year for
developing countries.
As a result of Kennedy Round, the Common External Tariff
of the European Community fell to 6.6%.
Kennedy round agreement was signed on June
30,1967; last day of the US negotiating authority
under the Trade Expansion Act.


Multilateral Tariff Reductions
(Simple Average MFN Tariff Rates, Industrial products)
1958 Dillon Round 1968 Ext. Tariff Kennedy Round

-------------------------------------------------------------------------------------------------
---------
Belgium 9.7 8.7 10.4 6.6
France 17.0 15.3 10.4 6.6
Germany 6.4 5.8 10.4 6.6
Italy 18.7 16.8 10.4 6.6
Netherlands 9.7 8.7 10.4 6.6
UK 16.5 14.9 14.9 9.2
Denmark 5.6 5.2 5.2 3.2
Austria 14.9 11.4 11.4 8.2
Sweden 6.5 6.3 6.3 4.2
Norway 10.3 10.3 10.3 6.4

8. Tokyo Round (1973-79)
Time- September 1973 – November1979
Countries – 102
• Discouraging economic climate during Tokyo Round :
– Oil crisis (1973); World-wide “stagflation”(Crisis)
– Proliferation of non-tariff barriers during the early 1970s.
– Strained trade relations between the US, the EC and

Japan

Main agreements, understandings,
decisions & declarations of Tokyo
Round:
 Agreement on Govt. Procurement,
 Agreement on Anti-dumping Code,
 Agreement on Customs Valuation Code,
 Agreement on Import Licensing
procedures,
 Agreement on Subsidies Code,
 Agreement on Trade in Civil Aircraft,
 Declaration on Trade measures taken for
Balance of payment purposes,
 International Dairy Agreement,
 International Bovine meat agreement,
 Safeguard Action for development
purposes. www.technolexindia.com, http://technolexindia.blogspot.com
04/20/11 32
US argued for further linear tariff cuts
– EC sought greater harmonization of tariffs
• After 4 years, an agreement was reached: The “Swiss
formula”
t1 = c*t0/(c+t0)
– where t0= original tariff and t1 = final tariff (both in
percentage terms)
Negotiations resulted in the value of c being set at 16
Table: Tariff changes in the Tokyo Round; averages,

weighted by MFN imports
Pre-Tokyo (%) Post-Tokyo (%) Reduction
Finished manufactures 10.3 6.9 33%
Semi-manufatures 5.8 4.1 30%
Raw materials 0.8 0.4 52%
Total industrial products 7.2 4.9 33%

9. Uruguay Round (1986-94)
Time- September 1986 – December1993
Countries – 123
• Period following the Tokyo Round
– World-wide recession
– Trade conflicts between three major trading blocs: US, EC,
Japan
– US-EC trade disputes centered on agricultural issues (EC
became exporter)
– US wanted Japan to open its domestic market for US exports
– EC wanted to limit Japanese export growth
• GATT ministerial meeting (1982): Attempt to meet problems
left by the Tokyo Round failed in “Resurgence of protectionism”
• US reacted to protectionist pressure and considered the
initiation of a new round of negotiations

• Japan favored a new GATT round: Multilateral negotiations
were preferred to bilateral pressure from the US and the EC
• Other countries were mostly in favor of new round:
– Smaller industrial countries wished to curtail the tendency of
the ‘big three’ to ignore GATT principles
– Agricultural-exporting countries were concerned about US
producer subsidies and EC export subsidies
– Developing countries wanted to secure greater tariff
preferences
• A committee was established to determine the objectives of
a new round of negotiations to be launched in 1986
• There was little agreement between the ‘big three’
• Initiative was taken by G9 group of mid-sized industrial
nations and G10 group of developing countries led by India
and Brazil

Negotiating groups in the Uruguay Round
a) Trade barriers and related matters

1) Subsidies and countervailing measures
2) Non-tariff measures
3) Safeguards
4) Tariffs
b) Sector specific matters

5) Agriculture
6) Natural resource products
7) Services
8) Textiles and clothing
9) Tropical products

c) Procedures
10) Dispute settlement
11) GATT articles
12) Functioning of the GATT
13) Multilateral Trade Negotiations
d) Others
14) Trade related aspects of intellectual property
(TRIP‘s)
15) Trade related investment measures (TRIMs)
04/20/11 37
• The goals set at the Uruguay Round were ambitious:
– Inclusion of services and intellectual property rights
– Better integration of agriculture, textiles and clothing into
the system
• The prominence given to agriculture reflected the interests
of the US and the Cairns Group (agricultural net-exporting
countries)
• The objectives for agricultural commodities were:
– Improved market access for imports
– Discipline in direct and indirect producer subsidies
– Bringing of all measures affecting import access and export
competition within GATT rules and disciplines
• Meeting of trade ministers in Montreal in 1988: Four
negotiating groups faced serious problems to find an
agreement (Textiles and clothing, safeguards, agriculture,
TRIP’s)

• An agreement on agriculture seemed out of reach:
– US wanted abolition of all trade distorting subsidies in
agriculture
– EC was unwilling to negotiate on the substance of the CAP
– Cairns Group threatened to leave all negotiations if an
agreement on agriculture was not found
• The failure of the US and the EC to reach an agreement led
to the suspension of the Round in December1990 which was
the intended date for its completion
• At the end of 1991 the Secretary General of the GATT,
Arthur Dunkel, tabled a Draft Final Act (Dunkel Text):
– Reduction of specific agricultural tariffs
– Ratification of non-tariff barriers
– Cuts in domestic support
– Reductions in export subsidy expenditures and the volume
of subsidized exports

• US and Cairns Group were willing to accept the Dunkel
Text
• EC was reluctant and had an internal debate over reform of
its agricultural policy (MacSharry Reform of the CAP)
• In November 1992 the US and the EC reached finally a
bilateral agreement on agriculture (Blair House Accord)
which led to the final agreement of the Uruguay Round on
15 December 1993
• The Uruguay Round Agreements was signed on 15 April
1994 in Marrakesh
• The delay of the Uruguay Round allowed some
negotiations to progress further than would have been
possible in 1990:
It allowed the replacement of the GATT by the World Trade
Organization (WTO)

Ministerial Conference
General Council meeting as
Dispute Settlement Body General Council meeting as
Trade Policy Review Body
Appellate Body General Council
Dispute Settlement panels
Committees on
Council for Council for
Trade and Environment Council for
Trade and Development TRIPS Trade in Services
Subcommittee on Trade in Goods
Least-Developed Countries
Regional Trade Agreements Committees on
Balance of Payments Restrictions
Committees on Trade in Financial services
Budget, Finance and AdministrationMarket Access Specific Commitments
Agriculture
Working parties on Sanitary and Phytosanitary Measures Working parties on
Accession Technical Barriers to Trade Domestic Regulation
Subsidies and Countervailing Measures GATS Rules
Working groups on Anti-Dumping Practices
Trade, debt and finance Customs Valuation
Trade and technology transfer
(Inactive : Rules of Origin
(Relationship between Trade Import Licensing
and Investment, Trade-Related Investment Measures
(Interaction between Trade Safeguards
and Competition Policy
(Transparency in Government
Procurement) Working party on
State-Trading Enterprises
41
Year Name Sub. Countries Achievements
1947 Geneva Covered
Tariffs 23 Signing of GATT,
1949 Annecy Tariffs 13 Countries
45,000 tariff
1950 Torquay Tariffs 38 exchanged
Countries some
concessions affecting
5exchanged
,000billion
$10 tariff
ofsome
trade
concessions
8,700 tariff
concessions,
cutting the 1948
tariff levels by
25%
04/20/11 42
Year Name Sub. Countries Achievements
1956 Geneva Tariffs
Covered, 23 $2.5 billion in
1960 Dillon admission
Tariffs 26 tariff
Tariff reductions
of Japan concessions
Tariff worth
1964 Kennedy Tariffs, 66
anti-dumping $4 .9 billion worth
concessions of
world trade of
$40 billion
world trade

year Name Sub. Covered countri Achievements
es
1973 Tokyo Tariff, non-tariff 102 Tariff reductions
measures, worth more than $300
"framework" billion dollars
achieved
1986 Uruguay Tariffs, non- 123 the creation of WTO,
tariff measures, and extended the
rules, services, range of trade
intellectual negotiations, leading
property, dispute to major reductions
settlement, in tariffs &
textiles, agricultural
agriculture, subsidies, to allow
creation of WTO, full access for
etc textiles from
developing countries,
and an extension of
intellectual
property rights.
44
Uruguay round versus Earlier rounds
The spirit of opposition.
The agenda was made very heavy and oppressive for
the developing country.
Major focus of negotiations shifted from tariff cutting to
reduction in non-tariff barriers.
It covered every outstanding policy issue.
Developing countries were required to actively participate
in negotiation, meaning that they were to give concession
in order to receive additional concessions, something
which they had not done before.
Rush of new members in the last round had showed that
multilateral trade agreement was considered an
anchor for development.


Streamlined dispute settlement mechanism and Trade
Review Policy Mechanism.
Proposed creation of a new institution WTO.
More transparent rules for dumping investigationand rules
for determining the injury to the industry.
The coverage of government procurement widened.
It appeared that developing countries may have made
more concessions.

Agreement on
Agriculture (AoA)
To establish a fair and market oriented

agricultural trading system through
substantial progressive reduction in
agricultural support and protection
resulting in correcting and preventing
restrictions and distortions in world
agricultural markets
AREAS

OF COMMITMENTS

Domestic Support

Market Access

Export subsidies
Tariff & Non -
Tariff barriers to
Trade
Introduction:
International Trade policies deals with the
policies of the national governments
relating to exports of various goods and
services in various countries either on
equal terms and conditions or on
discriminatory terms and conditions.

Trade policies also aim at protecting the
domestic industry from the competition of
the advanced countries through imposing
quotas and build competencies by
providing subsidies.

Instruments of Trade
Policy:
Broadly classified into…..
Tariff
Non-Tariff

Tariff Barriers
What are tariff barriers?
Refers to the tax imposed on the goods when
they enter or leave the national frontier or
boundary.

What is the purpose of tariffs?
To protect the domestic industry by increasing
the cost of imported goods.
Example : GoI imposed tariffs to protect
domestic automobile industry, sugar industry,
cement industry and steel industry.

Types of Tariffs:
On the basis of Purpose:
Revenue Tariff:
 To provide state with the revenue.
 Levied on luxury goods.
Protective Tariff:
 To maintain and encourage those branches of home
industry protected by the duties.

On the Basis of Origin and Destination:
Ad Valorem Duty:
 Levied as the percentage of the total value of
the imported common duty.
Specific Duty:
 Levied per physical unit of the imported
commodity.
Compound Duty:
 Levied a percentage ad valorem duty plus a
specific duty on each unit of the
commodity. Eg. 1 lac + 10% of the price.


On the Basis of Country-wise Discrimination:
Single Column Tariff:
A uniform rate of duty is imposed on all
similar commodities irrespective of the
country from which they are imported.
Double Column Tariff:
 Two different rates of duty have been
imposed.
Triple Column Tariff:
 Two or more tariff rates are levied on each
category of commodity.

Who Gain from Tariff?
Government of the importing country earns in the
form of the revenue.
Industries of the importing country would find
market for their products as the imported goods
will be expensive.
Jobs in the domestic markets are saved.
Business for the ancillary industry, servicing,
market intermediation etc. is also protected.

Who are adversely
affected?
Consumers

Industries of the exporting country.

Other Impacts of Tariff
Barriers
Tariff
Tariff Barriers
Barriers tend
tend to
to Increase:
Increase:
1.Inflationary
1.Inflationary pressures
pressures
2.Special
2.Special interests’
interests’privileges
privileges
3.Government
3.Government control
control and
and political
political considerations
considerations in
in
economic
economic matters.
matters.
Tariff
Tariff Barriers
Barriers tend
tend to
to Weaken:
Weaken:
1.Balance-of-payments
1.Balance-of-payments positions
positions
2.Supply-and-demand
2.Supply-and-demand patterns
patterns
3.International
3.International relations
relations (they
(they can
can start
start trade
trade wars)
wars)
Tariff
Tariff Barriers
Barriers tend
tend to
to Restrict:
Restrict:
1.Manufacturer’
1.Manufacturer’supply
supply sources
sources
2.Choices
2.Choices available
available to
to consumers
consumers
3.Competition
3.Competition
04/20/11 58
Non- Tariff Barriers
 Non-Tariff measures include all measures,
other than tariffs, the effect of which is to
restrict imports, or to significantly distort trade.




D iffe re n t Typ e s o f N o n -Ta riff
B a rrie rs:
(1)
(1) Specific
Specific Limitations
Limitations onon Trade:
Trade:
1.Quotas
1.Quotas
2.Import
2.Import Licensing
Licensing requirements
requirements
3.Proportion
3.Proportion restrictions
restrictions of
of foreign
foreign to
to domestic
domestic
goods
goods (local
(local content
content requirements)
requirements)

(2)
(2) Customs
Customs and
andAdministrative
Administrative Entry
Entry Procedures:
Procedures:
1.Valuation
1.Valuation systems
systems
2.Antidumping
2.Antidumping practices
practices
3.Documentation
3.Documentation requirements
requirements
4.Fees
4.Fees
(3)
(3) Government
Government Participation
Participation in
in Trade:
Trade:
1.Government
1.Government procurement
procurement policies
policies
2.Export
2.Export subsidies
subsidies
3.Countervailing
3.Countervailing duties
duties
4.Domestic
4.Domestic assistance
assistance programs
programs
(4)
(4) Charges
Charges on on imports:
imports:
1.Prior
1.Prior import
import deposit
deposit subsidies
subsidies
2.Administrative
2.Administrative fees
fees
3.Special
3.Special supplementary
supplementary duties
duties
4.Import
4.Import credit
credit discriminations
discriminations
5.Border
5.Border taxes
taxes
(5)
(5) Others:
Others:
1.Voluntary
1.Voluntary export
export restraints
restraints
2.Monetary
2.Monetary Barriers
Barriers

Impact of NTBs:
Have emerged as potent Protectionist tool.

It being less transparent, its difficult to identify

and quantify its impact.

Dumping & anti
dumping
The Meaning of
Dumping?

“Dumping is a situation of international price
discrimination, where the price of a product
when sold to the importing country is less than
the price of the same product when sold in the
market of the exporting country.”


Why does dumping take place?
As a short-term predatory pricing strategy to
drive competitors out of the market

As a result of market intervention or state

subsidies that enable companies to artificially
lower their prices

But there is something MORE!

When the price causes or threatens to cause
material injury to the domestic industry of the
importing country can there be an action
against dumping.

An anti-dumping investigation can be started
only if there is a written complaint on behalf of
the domestic industry.(a significant share of the
domestic producers have to support the
complaint).

Certain terms to be
defined
Normal Value: The comparable price at which the
goods under complaint are sold in the domestic
market of the exporting country.

Can be determined by:
 domestic sales
 comparable representative export price to
an appropriate third country.
 constructed normal value, i.e. the cost of
production in the country of origin with
reasonable addition for administrative,
selling and general costs and reasonable
profits.
Export price: The price at which it is exported
to the importing country.
Dumping Margin: The margin of dumping is
the difference between the Normal value and
the export price of the goods under
complaint. It is generally expressed as a
percentage of the export price.


Dumping Margin
Calculation
Compare Exporter Price
to Normal Value
Exporters Normal Value
Price
Normal Value $110 . 00
Exporter Price $90 . 00
Difference
Attributable $20 . 00
to Dumping
Difference
Dumping Attributable
= $20 . 00 / $90 . 00 = 22 . 22 %
Margin to Dumping / exporter
price

How is Dumping
Measured?
fundamental parameters are determined.
a)Normal domestic selling price of the product or
similar products in the exporting country.
b)Export price being offered in the importing
country.
 Both these elements have to be compared
at the same level of trade, generally at ex-
factory level, for assessment of dumping.


Domestic price of exporter >
export price
Dumping = price
discrimination between
national markets


what is Injury?
Injury parameters include factors such as:
o Actual or potential decline in sales
o Loss of profits
o Market share
o Capacity utilization
o Employment
o Wages
o Ability to raise capital
o Lost contracts

Non-injurious Price
 NIP is that level of price, which the industry is,

expected to have charged under normal
circumstances in the exporter market during
the period defined.
The Injury Margin is the difference between the
Non-Injurious Price due to the Domestic
Industry and the Landed Value of the dumped
imports.


Anti-dumping75
(Article VI of GATT 1994)
www.technolexindia.com, http://technolexindia.blogspot.com 04/20/11

Legal framework
Based on article VI of GATT, 1994
Customs tariff act, 1975 sec 9A, 9B (as
amended in 1995)
Investigations by designated authority, Ministry
of Commerce
Imposition and collection by Ministry of Finance

Factors affecting
Comparison of normal value
and export price
Export price and normal value must be
compared at he same level of trade, such as
at the ex-factory level
allowance made for differences that effect
price comparability. These are
 Physical characteristics
 Taxation
 Quantities etc..


How did it all begin?
In the 19th century European Sugar Industries
appealed to their respective governments for
protection against sugar being dumped at
unfairly low prices.
In 1902, there was a formal agreement on anti-
dumping. Canada adopted the first anti-
dumping law in 1904 followed by the European
countries and then the US in 1916.
Formed the basis for the original GATT article
(Article VI of GATT) on anti-dumping in 1947.

Subsequently, codes on anti dumping were
developed during the Kennedy Round (1962-
67) and Tokyo Round (1973-79).

However, these were not binding on all GATT
members; they were open to signature by
those countries that wished to do so.

But the Uruguay Round, (1986-94) anti-

dumping agreement is an agreement
binding on all GATT or WTO members.



What is anti dumping ??
It is a measure to rectify the situation arising
out of the dumping of goods and its trade
distortive effect.
Re-establish fair trade.
The use of anti dumping measure as an
instrument of fair competition is permitted by
the WTO.
It provides relief to the domestic industry
against the injury caused by dumping.

difference between anti
dumping duty and Normal
Customs duty
Antidumping duty Normal customs duty

To guard against unfair means of raising revenue

trade practices and for overall
 trade remedial measures. development of the
economy.
not necessary in the
nature trade and fiscal policies of
the Government
levied against exporter /
country in as much as Necessary in nature
they are country specific universally applicable to
and exporter specific. all imports irrespective
of the country of origin
and the exporter.
Imposition of duty
üIf there is dumping but no injury then no duty

can be imposed.
ü
üDuty remains in force for 5 years.
üRe-determination at a “sunset review”.
ü
üYearly administrative reviews if requested by
 domestic industry or exporter.

Essentials for initiating an
anti dumping investigation
Sufficient evidence to the effect that ;

there is dumping
there is injury to the domestic industry; and
there is a causal link between the dumping and
the injury, that is to say, that the dumped
imports have caused the alleged injury.


Link between dumping and
injury
No anti dumping duty shall be recommended

without a finding of this causal relationship.
That is to say,
Dumping should lead to Injury
The causal link is to be established generally in
terms of the following effects of dumped
imports on domestic industry: -
volume effect
price effect

The volume effect of dumping relates to the
market share of the domestic industry.
for price effect, significant price under cutting
by the dumped imports as compared with the
price of the like product in the importer
country.

S ta ke h o ld e rs
 Against  In Favour
 
Consumers Importing country

Exporters currently protected
Economists industries
Importing country
Regional
Labor Unions
Agreements
(NAFTA) 
 


04/20/11 
Relief under Anti Dumping
mechanism
anti dumping duty imposed against those
countries, which could go up to the dumping
margin.
may terminate investigation if the exporter
concerned furnished an undertaking to revise
his price


ALSO !!!
de-minims margin
Any exporter whose margin of dumping
is less than 2% of the export price shall
be excluded
Investigation is terminated if the volume
of the dumped imports from a
particular country accounts for less
than 3% of the total imports of the like
product.
The cumulative imports of the like
product from all these countries who
individually account for less than 3%,
Suo-Motu cases

Rule 5(4) of the Anti Dumping Rules provides

for suo-motu initiation of anti dumping
proceedings by the Designated Authority.
The Authority can initiate the anti dumping
investigation on its own without any
complaint/petition filed in this regard

Period of Investigation
Should not be less than six months and not
more than eighteen months.
The most desirable period of investigation is a
financial year. (period should be as
representative a possible)
For the purposes of injury analysis, the
domestic industry has to furnish the relevant
data for the past three years.


Analysis of Lodging of
complaint complaint
45 days
Preparation and Initiation
sending of
questionnaires
Sending of
Analysis of questionnaires
questionnaire
9 responses
Steps in an
months
Anti-Dumping
On-spot verification
visits
Internal decision +
consultation of MS +
translation
Imposition of
provisional measures
investigation
if warranted and
Analysis of disclosure disclosure of
reactions decision to interested
parties
AD 6 months Additional on-spot
verification visits if
AS 4 months needed
Internal decision
+ consultation of Final disclosure to
MS + translation interested parties
Imposition of
Total Duration Measures
Measures are definitive measures
AS 13 months normally
normally if warranted
imposed for 55
imposed for
AD 15 months years
years
91
Stages of the investigation
process
A. Preliminary Screening:
The application is scrutinized to ensure that
it is fully documented
provides sufficient evidence for initiating an
investigation.
If evidence not adequate, then a deficiency
letter is issued.
Till then cannot be considered as
application pending before authority.


B. Initiation:

Designated Authority determines that

the application has been made by or on
behalf of the Domestic Industry.
It also examines the accuracy and
adequacy of the evidence provided
The Initiation notice will be issued
normally within 5 days from the date of
receipt of a properly documented
application.

C. Access to Information:
The Authority provides access to the non-
confidential evidence
available for inspection to all interested parties
on request after receipt of the responses.
D. Preliminary Findings:
The Designated Authority will proceed

expeditiously with the conduct of the
investigation
It makes a preliminary finding containing the
detailed information on the main reasons
behind the determination.


E. Provisional Duty:

A provisional duty not exceeding the margin of

dumping may be imposed by the Central
Government on the basis of the preliminary
finding
Can be imposed only after the expiry of 60
days from the date of initiation of
investigation.
The provisional duty will remain in force only
for a period not exceeding 6 months,
extendable to 9 months under certain
circumstances.


F. Oral Evidence
Interested parties can request the Designated
Authority for an opportunity to present the
relevant information orally.
Such information shall be taken into
consideration only when it is subsequently
reproduced in writing.
G. Disclosure of information:
Based on these submissions and evidence

gathered the Authority will determine the
basis of its final findings.


the Designated Authority will inform all
interested parties of the essential facts, which
form the basis for its decision before the final
finding is made.
H. Final Determination:
The interested parties submit their response to

the disclosure and
The Authority examines these final
submissions of the parties and comes out
with final findings.


Where does Anti-dumping
stand today ?
 Anti-dumping measures taken by WTO
members have increased from 129 in 1994
to 208 in 2008; 83%.

 New users: Argentina, India, Brazil, South
Africa.

 Traditional users: Canada, U.S., European

Union, Australia, Mexico.

 Most affected industries: Metal, Chemical,
plastic, textiles, machinery and equipment,
agriculture and food.

Anti-Dumping Measures Who used them
more?

Most Affected Sectors
17%
4% 39%
7%
9%
11% 13%
METAL CHEMICAL PLASTIC TEXTILES M&E A&F OTHER
Source: WTO Secretariat, Rules Division Anti-dumping

Database
ANTI–DUMPING
INITIATIONS BY SECTOR
1995 - 2006
160
140
120
100
80
60
40
20
0
5
6
9
0
9
0
9
0
9
0
1
2
Metals Chemicals Plas Tex/Cloth

Database
ANTI–DUMPING NUMBER OF CASES
1979 - 2008

Database
MEASURES
1979 - 2008

Database
Who makes the most USE
?
Developing Countries Use Antidumping more
intensely than developed countries.


ANTI-DUMPING
MEASURES 1995 - 2006
Developed / Developing Members
Total 1 400
MEASURES : 1 900
Developin
g
Developing 75 %
75 %
Total
500
Developed Develope
25 % Developin
g d
80 % 25 %
Source: WTO Secretariat, Developed Members Developing Members
Developed
Rules Division Anti- 20 %
dumping Database
04/20/11 105
Top 10 Users of AD Law (by
initiations) 1995 - 2006

Database
ANTI–DUMPING
Initiations by Importing Member
1995 – 2000
218
181
Total 1 529 173
150
139
116
77 79
43 44
Kor e
a co da Braz
il Aust
r nt S A fr India US EC
Mexi Cana Arge

Database
107
ANTI–DUMPING
Initiations by Importing Member
2001 – 2006
284
Total 1 516
192
144
127
89
80
73
65
55
Braz
il da Aust
r nt ey Chi n
a EC US Inda
Cana Arge Turk

Database
108
Trade Remedy Disputes
(Panels Established, 1995 - 2006)
Total 55
Countervailing
Measures Safeguards
11 11
Anti-Dumping
33
Source: WTO Secretariat, Rules

Division
04/20/11
Anti-dumping Database
109
Impact of Anti-Dumping
Laws
 Pros  Cons
 
Prevents Monopolies Against Free Trade

Protects Vulnerable Concept
Industries Trade Barrier – Lowers
Allows Firms to Economic Growth
Compete Distorts the Market
Preserves Jobs Protects Firms from
Competition
Hurts Consumers

Notice INDIA’s proportion
Proportion of AD cases initiated by the countries
0.3
0.25
0.2
0.15
0.1
0.05
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
India United States Canada China European Community

Database
Anti-Dumping Related Disputes
Panels Established 1995 - 2006
6 6
 5 5
Total 33
2 2 2 2 2
1
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Database 112
Various minuses of AD
measurement
 law
Unclear concept of “ordinary course of
trade”.
For computation of the normal value
complicated cost calculations and
allocations
Arbitrariness steps in especially when
there is a conflict between accounting
practices in the exporting country and
the importing country.
This is so because investigating
authorities typically follow accounting
practices of the importing country
“ India to levy
antidumping duty on
China telecom gear ”-
Business Standard - 15
December, 2009
 India to impose antidumping duties on some
equipment imported from China.
Chinese companies entered the Indian telecom
market, offering products and services at
prices about a third cheaper than that of
global competitors.
Indian manufacturers hurt as well


 Fibrehome Telecommunication Technologies
Ltd. will have to pay a duty of 236%, Alcatel-
Lucent Shanghai Bell Co. 29% and Israel's ECI
Telecom Ltd. 93% on equipment imported
from China

 The Indian Shrimp
Industry Organizes
to Fight the Threat
of Anti-Dumping
Action
 (CASE STUDY)

History
The Ad Hoc Shrimp Trade Action Committee
(ASTAC), an association of shrimp farmers in
eight southern states of the United States,
filed an anti-dumping petition against six
countries — Brazil, China, Ecuador, India,
Thailand and Vietnam.
The petition alleged that these countries had
dumped their shrimps in the US market.

History
 on 21 January 2004 the US Department of
Commerce (DOC) announced the initiation of
anti-dumping investigations against the six
countries.
The Department notified the International
Trade Commission (ITC) of its decision on
initiation.
On 17 February 2004 the International Trade
Commission announced its decision that
there was a reasonable indication that the US
shrimp industry was affected due to Anti-
dumping. www.technolexindia.com, http://technolexindia.blogspot.com
04/20/11 119
The Department of Commerce continued with
its investigations and gave its preliminary
determination on 28 July 2004.
The ratio of preliminary duty varies between
3.56% and 27.49% by the DOC.


The weighted average rate for India is 14.2%,
The average rate for
 China is 49.09%,
 Brazil 36.91%,
 Vietnam 16.01%,
 Ecuador 7.3%
 Thailand 6.39%.

II. The National and International
context
 On 26 February 2002, Reggie Dupre, a
Louisiana state senator, alleged that tainted
farm-raised Asian shrimp was being diverted
from Europe and dumped on the US market.

The national and international
context
Vietnam, one of the countries identified almost
at the beginning of the SSA(South America
Shrimp Association) exercises and also highly
dependent on the US market for shrimp
exports, was the first to protest.
 Foreign Ministry spokeperson Phan Thuy
Thanh said in a statement on 12 September
2002 that ‘I can say with certainty that
Vietnam has never dumped its shrimp, and its
shrimp have been sold at market prices.’

Source: WTO Secretariat, Rules
Division
04/20/11
Anti-dumping Database
Indonesia protests as
well
Rokhmin Dahiri, the Indonesian Maritime and
Fisheries Minister, denied allegations that the
Indonesian government subsidized its shrimp
farmers.
He said that the price of shrimp on the
domestic market was much lower than the
export price.
“The dumping charge was baseless and,
therefore, the United States should exclude
Indonesia from the proposed anti-dumping
investigations. ”
The Indian government and the Indian shrimp
industry were aware of the threat.
Arun Jaitley, the then Minister for Commerce,
made a statement in June 2003 after his

official visit to the United States: ‘We are
anticipating an action against our shrimp
exports because our share in the US market is
on the rise.

The main contentions of the petitioners
The six named countries accounted for 74% of
shrimp imports in the US market.
Imports from the six countries increased from 466
million lbs. in 2000 to 650 million lbs in 2002.
Import prices of the targeted countries had
dropped by 28% in the previous three years.
The average unit value of the targeted countries in
2000 was $3.54; this had fallen to $2.55 in 2002,
on a headless, shell-on equivalent basis.

The main contentions of the
petitioners
The average dockside price for one count size of
gulf shrimp dropped from $6.08 to $3.30 per

pound from 2000 to 2002.
The United States was the most open market in the
world.
High tariff rates in other large importing countries
provided a powerful incentive for exporters to

increase shrimp shipments to the United States.
III. The Indian shrimp industry and its
response
The anti-dumping investigations against Indian shrimp
imports might be initiated was hinted at during
bilateral talks when the then Commerce and Industry
Minister Arun Jaitley had met his counterpart in
Washington at that time.
The reason given was that India’s shrimp exports to the
United States had been rising rapidly during the
previous three years, from $255.93 million during
2000-1 to $299.05 million during 2002-3.
III. The Indian shrimp industry
response
The United States, traditionally a buyer of
small-sized shrimp from India, has now
started buying many other varieties,
including black tiger shrimp, resulting in its
occupying the top slot in India’s export
markets of marine products, replacing Japan
in 2002-3.

Commerce Minister on the possible threat to
Indian shrimp exports to the United States,
SEAI(Seafood Exporters Association of India
(Kochi, Kerala, India). and MPEDA(The Marine
Products Export Development Authority) went
into action.

The SEAI (Sea food export Association of India)
has estimated a total budgetary requirement
of Rs. 70 million to fight the case. Of this,
SEAI would mobilize Rs. 40 million internally
and the remaining Rs 30 million would be
collected from its members, depending on the
volume and value of their individual exports
to the US market.

Indian argument
First, there are specific variations between the
shrimp caught off the south-west coast of the
United States and in Indian waters, so that
prices are bound to be different.
India’s shrimp exports are predominantly of
black tiger and scampi varieties which are not
cultivated in the United States’, according to
the president of SEAI.

Even more arguments…
Second, while fishing in the United States is a
capital-intensive activity calling for major
investment, in India shrimp capture is carried
out with a very low level of capital and
requiring hardly any investment.
This makes the cost of production considerably
lower in India compared with that for shrimp
sea-caught off the US coast.

DOC is confident
 Department of Commerce observed that India
had a strong case as India was exporting
mainly ‘tiger shrimps which are not found
there and that too, in unprocessed form’.
Noting that 80% of shrimp consumption in the
United States is met through imports.

Shrimp exports to the United States had come
almost to a standstill due to the uncertainty
regarding the contingent applicability and
incidence of the anti-dumping duty.

US Has Quarreled Before
In 1976 US banned shrimps ,It was on the
ground that trawling for shrimp by
mechanized means had been adversely
affecting certain varieties of sea turtles.
The WTO ruled against the United States and
asked it to make the regime WTO-compatible.
However, since that had not yet happened,
India’s exports to the United States of aqua-
culture shrimp and shrimp caught by non-
mechanized means were being made on the
basis of certification by the MPEDA, as
required under
04/20/11 the law.
IV. Lessons learnt
Several visits by the representatives of those
two bodies to Washington at critical points also
helped to bring an understanding of the nature
of the problem and how to face it.
This resulted in the selection and appointment
of the legal counsel, in September 2003.

Lessons learnt
The speedy resolution of the issue of financing
helped Indian case.
The shrimp industry in India shouldn’t have
been focused on only one or two major
markets for growth.
Previously it was Japan and during the last few
years, it has been the United States.

Finally
India learnt the importance of diversification.

A. J. Tharakan, the SEAI president, has said that

they are exploring alternative markets to
make up for the loss of the lucrative US
market.

‘But it will be a long drawn-out process. It is
not easy to establish your presence.’


VICTORY for
INDIA!!
“On 27 th Jan exports to
US were resumed.”
Business line newspaper– 1st

Feb, 2010

Export Subsidies
•Cut in value of subsidies
–Developed countries - 36 % (1995 - 2000)
–Developing countries - 24 % (1995 - 2004)
•
•Cut in subsidized quantities
Developed countries - 21 % (1995 - 2000)

Developing countries - 14 % (1995 - 2004)
(Base Period : (1986 - 1990)
To develop internationally agreed

disciplines to govern export credits,
guarantees or insurance programmes
•

Domestic Support
In WTO terminology, subsidies in general are
identified by “boxes” which are given the colours of
traffic lights: green (permitted), Blue (slow down —
i.e. be reduced),
Amber -( Forbidden)
 Green Box - Research,
Extension, PDS,
Decoupled Payments etc;

 Blue Box - Production
Limiting Subsidies ;

 Amber Box - AMS-subject to

reduction
commitments , Viz.
 Product specific (MSP)
 Non product specific
(input subsidies-
fertilizer, Power,
Anomaly in WTO Provision
•
•Developed countries still continue to heavily
subsidize their agriculture.
•
•As per the World Trade Organisation provision
these countries were required to reduce their
subsidy considerably, so that the developing
countries could get a chance to export their
products to these countries.

RESULTS OF THESE ANOMALIES
There were three problems with the AoA –
1.it ignored the realities of global agricultural markets,

2.
3.it reinforced industrial agriculture at the expense of
sustainable agriculture, and
4.
5.It failed to acknowledge the widely differing needs of
countries at different levels of development.
6.

Agricultural Subsidies
•Agricultural subsidies have affected developing country farmers both by
denying access to rich markets and allowing farmers from advanced countries
to sell to developing countries at suppressed prices.
•This is particularly relevant to India because agricultural products account
for nearly 20% of Indian exports.
Agricultural Support in the US ($US million)
1 9 9 18 9 9 29 0 0 20 0 0 21 0 0 2
T o t a l v a l u e o f p 1 r 9 o 0 d ,1 u0 8 8c 5 2t ,1i 2 o 8 5 n 9 8 ,1 (3 a9 1 t7 8 ,2f 0 a 0 3 r 0 7 m, 9 0 g 3 a t e
P r o d u c e r S u p p 4o 8r ,t 2 5E7 5 s2 , t 9 i4 3m 9 2 , a 6 5t 7 e1 3 , ( 6 P3 8 9 S3 , 5E 5 ) 9
P e r c e n t a g e o f g o v e r n m e 2n 5t . s4 u p3 p0 o. 2r t 2 6 . 2 2 6 . 2 1 9 . 7
Source: OECD

INDIA SEEKS
•Protecting our food and livelihood security by having sufficient

flexibility for domestic policy measures.
•Protecting domestic producers from the surge in imports or

significant decline in import prices.
•Substantial reduction in export subsidies and domestic

support to agriculture in the developed countries for greater
market access to products of developing countries.
•Finally, a more equitable & fair trading framework for

agricultural commodities
MARKET ACCESS ISSUES CAN NOT BE SEEN IN ISOLATION TO

SUBSIDY REGIME

Domestic support
•The negotiations on domestic support should include the following
elements:
•Substantial reductions in all forms of domestic support should be

undertaken by the developed countries.
•Subsidies excluded from the discipline introduced by the AoA, i.e.

those appearing in the “Blue Box” and the “Green Box”, need to be
re-assessed, particularly from the point of view of their influence on
production.
• The Peace Clause “Article 13 (a) and 13 (b)” shall not be extended
beyond implementation period.

Export Subsidies
The negotiations on export subsidies should include the following
issues:
Countries using export subsides should phase out this form of

farm support within two years of implementation of the
revised disciplines to be followed by countries in the
agricultural sector.
Export subsidies discipline should include all forms of

spending that enhances the capacities of exporters to
increase trade, e.g. export credit, guarantees and
insurance programmes.
The Peace Clause “Article 13 (c)” shall not be extended

beyond implementation period.

Present Stage of
Negotiations
 The Cancun Ministerial failed to arrive at

any agreement on modality for
agriculture.

 There was no willingness on part of
developed countries to recognize the
genuine concerns of the developing
countries, especially in agriculture

 The US & EU attempted to drive their own
agenda, at the expense of Doha
Declaration

 The concerns of the developing countries
were expressed by a group viz. G-20 at
Cancun.

Why much of the focus must be on
agriculture…
•Even though it provides less than 4% of global GDP
and 9% of int’l merchandise trade
•
•OECD manufacturing tariffs have fallen by 9/10ths
over the past 60 years to <4%, while agricultural protection has
risen, Agric. applied (bound) tariffs now average nearly 5 (10)
times manufactures tariffs globally
•Also, the vast majority of the world’s poor rely on farming for
a living, and may be hurt by agric protection policies of rich
countries

Why focus on agriculture
•True, the harm to some DC farmers from
rich-country agricultural protection is reduced
via non-reciprocal preference schemes such
as the ACP’s Lome Agreement, EBA and
AGOA
•But those schemes contravene the core WTO

rule of non-discrimination
•
•In particular, they exclude numerous populous
D.C’s (e.g. Brazil, China, India, Indonesia,
Pakistan, Vietnam)
•Hence they may harm more poor farmers
(through trade diversion) than they help.

1)
Disputes in WTO: total 194

As complainant As defendant
70
60
50
40
30
20
10
0
USA EU Japan Developing
countries

Which agreements are subject to disputes?
Antal
30
25
20
15
10
0
SPS/TBT Agriculture Textiles TRIMS TRIPS GATS

Basic Principles
Non-Discrimination Principle
MFN treatment
National Treatment
Security and predictability of market access

Increasing the participation of developing
countries in the multilateral trading system
Fair trade – possibility to respond to unfair
trading practices such as dumping and
subsidization
Transparency


MFN Treatment
No discrimination between like
products / services originating in
or destined for other WTO
Members. Each trading partner
gets immediately and
unconditionally the best
treatment given to any trading
partner even if not a WTO
Member
MFN Treatment – a three-tier
test
Whether the governmental measure at issue
confers a trade advantage of the kind covered
by Article I:1 of the GATT 1994
Whether the products concerned are “like
products”
Whether the advantage at issue is granted
immediately and unconditionally to all like
products originating in other WTO Members

MFN Treatment – Trade
Advantage
Panels and the Appellate Body have interpreted
the term “advantage” broadly to encompass
not only tax/customs advantages, but also
laws, regulations and requirements that affect
importation and exportation and alter the
scales of competition

MFN Treatment – “Like
Products”
Not defined in the GATT, but guidance
provided by case law
In Japan-Alcoholic Beverages, the Appellate
Body likened the concept of “likeness” to
an accord, as it “stretches and squeezes in
different places”
Among the factors which have been taken
into account by panels are the following:
the properties, nature and quality of the
products
the end-uses of the products
consumers' tastes and habits
the (international) tariff classification of the
04/20/11
products
MFN Treatment – “Immediately
and Unconditionally”
The words “immediately “ and “unconditionally”
have been interpreted broadly to mean that a
Member cannot demand reciprocal treatment
as a condition for extending MFN treatment
Likewise, extension of MFN treatment cannot be
made conditional on a Member having or
passing a specific legislation or undertaking a
certain action

MFN Treatment-
Exceptions
GATT Art. I:2-4 (Historical Preferences)
GATT Art. IV(c) (Cinematographic Films)
GATT Art. XX (General Exception)
GATT Art. XXIV:3 (Frontier Traffic)
GATT Art. XXIV:5 (Free-Trade Area and
Customs Unions)
GATT Art. XXI (Security Exception)
“Enabling Clause” (1979 Decision)
Marrakesh Agreement Art. IX:3 (Waiver)
è
MFN Treatment - GATS
Art II:1 of the GATS
For any measure covered by the GATS, each
Member shall accord immediately and
unconditionally to services and service
suppliers of any other Member treatment
no less favourable than that it accords to
like services and service suppliers of any
other country.
The Appellate Body held in EC – Bananas
III that the obligation imposed by Article II
is unqualified, and does not exclude de
facto discrimination.
MFN Treatment – Exceptions under GATS
GATS Art. II:2 (Specific List of MFN Exemptions)
GATS Art. II:3 (Advantages to Adjacent
Countries)
GATS Art. V (Economic Integration)
GATS Art. V bis (Labour Market Integration)
GATS Art. XIV (General Exception)
GATS Art. XIV bis (Security Exception)

MFN Treatment - TRIPS
Art 4 of the TRIPS Agreement
With regard to the protection of intellectual
property, any advantage, favour, privilege or
immunity granted by a member to the
nationals of any other country shall be
accorded immediately and unconditionally to
the national of all other Members
Exceptions: Art. 4(a)-(d) of the TRIPS
Agreement; TRIPS Art. 73 (Security Exception)
and Marrakesh Agreement Art. IX:3 (Waiver)

National Treatment
As a general rule, imported products must not be
discriminated against vis-à-vis domestic
products
Members cannot impose higher internal taxes or
more burdensome obligations on imported
“like” products
Determinants of likeness - the properties, nature
and quality of the products; the end-uses of the
products; consumers' tastes and habits and the
tariff classification of the products
None of these elements is dispositive

MFN Treatment v. National
Treatment
 Non- Discrimination Non-Discrimination


at the Border: Inside Border:

 Equal Treatment between Equal

Treatment
 WTO Members’ Products between Imported
and Domestic Goods

 Article I GATT Article III GATT

 (Article II GATS (Article XVII GATS
 Article IV TRIPS) Article III TRIPS)

Internal v. Border Measure
Difficult at times to distinguish between the two:
would an import ban enforced at the border be
subject to Article III or XI of the GATT 1994?
Basic rule
 Applied at the border Applied inside the
border

Article XI GATT
 Article III GATT
 or


Article III:2 of the GATT 1994 – First
Sentence – tax discrimination of like
products
The products of the territory of any Member
imported into the territory of any other
Member shall not be subject, directly of
indirectly, to internal taxes or other internal
charges of any kind in excess of those
applied, directly or indirectly, to like domestic
products
In Canada – Periodicals, it was held that the
following conditions have to be satisfied: (i)
whether the imported and domestic products
are like products; and (ii) whether the
imported products are taxed in excess of the
domestic www.technolexindia.com,
products http://technolexindia.blogspot.com
04/20/11 168
Article III:2 of the GATT 1994 – Second
Sentence – directly competitive or
substitutable products
Article III:2: 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.
Ad Art. III:2: A tax conforming to the requirements
of the first sentence of para. 2 would be
considered to be inconsistent with the
provision of the second sentence only in cases
where competition was involved between, on
the one hand, the taxed product and, on the
other hand, a directly competitive or
substitutable product which was not similarly
04/20/11
taxed. www.technolexindia.com, http://technolexindia.blogspot.com 169
Article III:2 of the GATT 1994 – Second
Sentence – directly competitive or
substitutable products
Held in the Japan-Alcoholic Beverages II case that the

following elements have to be satisfied:
Whether the imported and domestic products are
directly competitive or substitutable
Whether these products are not similarly taxed
Whether dissimilar taxation is applied so as to afford
protection to domestic producers


Article III:4 of the GATT 1994 –
Discriminatory domestic
rules/regulations
“The products of the territory of any contracting
party
imported the territory of any other contracting
party shall
be accorded treatment no less favourable than that
accorded to like products of national origin in
respect of
all laws, regulations and requirements affecting
their
internal sale, offering for sale, purchase,
transportation,
distribution or use…”.
Article III:4 of the GATT 1994 –
Discriminatory domestic
rules/regulations
Held in the Korea - Beef that the following elements
have to be satisfied:
Whether the measure at issue is a law, regulation or
requirement covered by Article III:4 GATT
Whether the imported and domestic products are ‘like
products’
Whether the imported products are accorded less
favourable treatment


Exceptions to the National Treatment
Principle under GATT
 GATT Art. III:3 (“Grandfathering”)
 GATT Art. III:8(a) (Government
Procurement)
 GATT Art. III:8(b) (Production Subsidies)
 GATT Art. III:9 (Prejudicial effect of
internal price control measures)
 GATT Art. III:10 and Art. IV
(Cinematographic films)
 GATT Art. XX (General Exception)
 GATT Art. XXI (Security Exception)
 Marrakesh Agreement Art. IX:3
(Waiver)
National Treatment Principle under the
GATS and TRIPS
As a general rule, foreign goods, services and
service providers, as well as IPR holders must
not be discriminated against vis-à-vis domestic
goods, services, and services providers, as
well as IPR holders
Unlike the GATT, NT principle flexible under GATS
Article XVII:1 of the GATS: In the sectors
inscribed in its Schedule, and subject to any
conditions and qualifications set out therein,
each Member shall accord to services and
service suppliers of any other Member, in
respect of all measures affecting the supply of
services, treatment no less favourable than
that it accord to its own like services and
service suppliers
.
National Treatment Principle
under the GATS
Art XVII:2: A Member may meet the
requirement of para.1 by according to
services and service suppliers of any other
Member, either formally identical treatment
or formally different treatment to that it
accords to its own like services and service
suppliers
Article XVII:3 of the GATS: Formally identical
or formally different treatment shall be
considered to be less favourable if its
modified the conditions of competition in
favour of services or service suppliers of the
Member compared to like services of service
04/20/11
supplierswww.technolexindia.com,
of any other Member
http://technolexindia.blogspot.com 175
Exceptions to the National Treatment
Principle under the GATS
 GATS Art. XIV (General Exception)

 GATS Art. XIV bis (Security
Exception)
 GATS Art. XXI (Modifications of
Commitments)
 Marrakesh Agreement Art. IX:3
(Waiver)

Binding of Commitments / Concession
Members commit themselves not to raise duties or
make concessions more restrictive than indicated
in their schedules of commitments / concessions
Art. II: 1(a) of the GATT: Each contracting party
shall accord to the commerce of the other
contracting parties treatment no less favourable
than that provided for in the appropriate Part of
the appropriate Schedule annexed to this
Agreement
 Exceptions to the “binding” principle are the following:
 GATT Art. II:1(b) (Other Duties and Charges - ODCs)
 GATT Art. II:2 (Internal Tax, Anti-Dumping or
Countervailing Duty, Customs Fees)
 GATT Art. XXVIII (Modifications of Concessions)
 Marrakesh Agreement Art. IX:3 (Waiver)

Binding of Commitments / Concession
 Art XX:1 of the GATS: Each Member shall set out in a
Schedule the specific commitments it undertakes under
Part III of this Agreement (GATS). With respect to
sectors where such commitments are undertaken, each
Schedule shall specify terms, limitations and conditions
on market access …
 Art XX:3: Schedules of specific commitments shall be
annexed to this Agreement and shall form an integral
part thereof.
 Exceptions
 GATS Art. XIV (General Exception)
 GATS Art. XIV bis (Security Exception)
 GATS Art. XXI (Modifications of Commitments)
 Marrakesh Agreement Art. IX:3 (Waiver)


Prohibition of Quantitative Restrictions
Art. XI:1of the GATT: No prohibitions or
restrictions other than duties, taxes or other
charges (regardless of form – quotas,
import/export licenses, other measures) shall
be instituted or maintained on imports/exports
Art. XIII:1: Limited exceptions permitted but
Members must respect the non-discrimination
principle in their imposition of QRs. They must
be similarly applied to all third countries
Art. XIII:2 Allocation of QRs or TRQ’s as close as
possible to expected shares that would have
been obtained in absence of restrictions.

Prohibition of Quantitative Restrictions -
Exceptions
GATT Art. XIX (Safeguards)
GATT Art. XI:2(a) (Critical Shortage of
Foodstuffs
or Other Essential Products)
GATT Art. XI:2(b) (Removal of a Temporary
Surplus
of a Like Domestic Product for which the
Imported Product
can be Directly Substituted)
GATT Art. XI:2(c) (Agricultural Products and
Fish)
-- Agreement on Agriculture (Tariffication)
GATT Art. XX (General Exception)
GATT Art. XXIV:5 (Free-Trade Area and Customs
Unions)
GATT Art. XXI (Security Exception)
Agreement on
04/20/11 Textiles and
www.technolexindia.com, Clothing
under the GATS
The use of QRs (Quantitative Restrictions) is
prohibited only for Sectors and Modes of
supply covered in the Schedule of Specific
Commitments.
Art XVI:1:With respect to market access through
the modes of supply identified in Article I (of
GATS), each Member shall accord services and
service suppliers of any other Member
treatment no less favourable than that
provided for under the terms, limitations and
conditions agreed and specified in its
Schedule.
under the GATS-Exceptions
GATS Art. XIV (General Exception)
GATS Art. XIV bis (Security Exception)
GATS Art. XVI:2 (QRs Allowed if Scheduled)
 number of service suppliers
 total value of service transactions or assets
 total number of service operations or total
quantity of service input
 total number of natural persons necessary for the
supply of a service
 specific type of legal entity
 foreign capital participation

Exceptions to GATT/GATS obligations
Safeguards: GATT Art. XIX and Agreement on
Safeguards
“If, as a result of unforeseen developments and of the
effect of the obligations incurred by a Member
under this Agreement (GATT), including tariff
concessions, any product is being imported into
the territory of that Member in such increased
quantities and under such conditions as to cause
or threaten serious injury to domestic producers in
that territory of like or directly competitive
products, the Member shall be free, in respect of
such product, and to the extent and for such time
as may be necessary to prevent or remedy such
injury, to suspend the obligation in whole or in
part or to withdraw or modify the concession”
Compensationwww.technolexindia.com,
04/20/11 –only after 3http://technolexindia.blogspot.com
yrs if absolute increase183
Exceptions to GATT/GATS obligations
 Safeguards: GATT Art. XII and Article XVIII:B – Measures to
safeguard balance of payments
 Art. XII: Notwithstanding the provisions of para. 1 of Article XI
(Prohibition of QRs), any Member, in order to safeguard its
external financial position and its balance of payments, may
restrict the quantity or value of merchandise permitted to be
imported, subject to the provisions of the following para of this
Art (GATT XII)
 Art. XVIII:B: In order to safeguard its external financial position and
to ensure a level of reserves adequate for the implementation of
its programme of economic development, a Member coming
within the scope of para. 4 (a) of this Art. (XVIII) [developing
countries] may, subject to the provisions of para. 10 to 13,
control the general level of its imports by restricting the quantity
or value of merchandise permitted to be imported; provided that
the import restrictions instituted, maintained or intensified shall
not exceed those necessary..”
 Article XVIII:C – infant industry clause available to developing
countries in the low stages of development
Exceptions to GATS obligations
Safeguards: GATS Art. X
There shall be multilateral negotiations on the
question of emergency safeguard
measures based on the principle of non-
discrimination. The results of such
negotiations shall enter into effect on a
date not later than three years from the
date of entry into force of the WTO
Agreement (--> 1.1.1998 )
Deadline not met.

Exceptions to GATT obligations
Special Safeguard Measures: Agreement on
Agriculture Article 5: Notwithstanding the
provisions of para. 1(b) of Art. II of GATT (Binding),
any Member may take recourse to the provisions
of para 4 and 5 below in connection with the
importation of an agricultural product, in respect
of which measures referred to in para 2 of Art. 4 of
this Agreement have been converted into an
ordinary customs duty (tariffication) and which is
designated in its Schedule with the symbol “SSG”
as being the subject of a concession in respect of
which the provisions of this Art.
May be invoked by Members which had undergone the
tariffication exercise: volume and price triggers
Possibility to impose a special safeguard measure
existed under the now defunct Agreement on
04/20/11Textiles and Clothing (Art
www.technolexindia.com, 6 of ATC). Cf. Chinese186
http://technolexindia.blogspot.com
Imposition of antidumping duties
irrespective of Article II of the GATT
1994 to offset unfair advantage
Art. VI:1 of the GATT 1994: Members
recognise that dumping by which products of one
country are introduced into the commerce of
another country at less than the normal value of
the products, is to be condemned if it causes or
threatens material injury to an established
industry in the territory of a member or materially
retards the establishment of a domestic industry.
…
Art. VI:2: In order to offset or prevent dumping, a
Member impose an anti-dumping duty not greater
in amount than the margin of dumping in respect
04/20/11
of such product. ...
Imposition of countervailing duties irrespective of
Article II of the GATT 1994 to offset unfair
advantage
 Art. VI:3 of the GATT 1994: Subsidy defined in the SCM
Agreement as a financial contribution by a government or
a public body to an industry or group of industries which
confers a benefit
 Members able to offset the benefit on the recipient through
the imposition of a countervailing duty after conducting
thorough investigations. Need to establish subsidization,
material injury or threat thereof to a domestic industry
(Art. VI:6)
 Elaborate rules on agricultural subsidies in the Agreement on
Agriculture. Other subsidies regulated under the SCM
Agreement. In the event of conflict, the AoA prevails
 Under the SCM Agreement, subsidies distinguished on the
basis of their effects: prohibited and actionable subsidies
Exceptions to GATT obligations- Art XX
Chapeau: “Subject to the requirement that such measures are
not applied in a manner which would constitute a means of
arbitrary or unjustifiable discrimination between countries
where the same conditions prevail, or a disguised restriction
on international trade, nothing in this Agreement shall be
construed to prevent the adoption or enforcement by any
Member of measures”
 List of ten exceptions (a) necessary to protect public morals; (b)
necessary to protect human, animal or plant life or health; (c)
relating to the importation or exportations of gold or Silver; (d)
necessary to secure compliance with laws not inconsistent with
GATT provisions; (e) relating to products of prison labour; (f)
imposed for the protection of national treasures (artistic, historic
or archaeological); (g) relating to conservation of exhaustible
natural resources if such measures are made effective in
conjunction with restrictions on domestic production or
consumption; (h) undertaken in pursuance of an
intergovernmental commodity agreement; (i) materials
necessary to ensure essential quantities to a domestic
processing industry …; (j) essential to the acquisition or
04/20/11distribution of products in general
www.technolexindia.com, or local short supply.
Exceptions to GATT obligations- Art XX – A
two-pronged test
In US-Gasoline and US-Shrimp, the AB held
that the following elements should be
satisfied:
 Does the challenged measure fall within one of the
exceptions listed in Article XX (a)-(j)?; and
 If yes, does it satisfy the requirements of ‘Article
XX-chapeau’?
As regards the first test, the cases below dealt
with the following exceptions:
§ (b) “measures necessary to protect human,
animal, or plant life”: EC-Asbestos
§ (d) “measures necessary to secure compliance
with”: Korea-Various Measures on Beef
§ (g) “relating to the conservation of exhaustible
04/20/11 natural resources”:http://technolexindia.blogspot.com
www.technolexindia.com, US-Gasoline and US- 190
Exceptions to GATT obligations- Art XX – A
two-pronged test
As regards the second test, the relevant

questions to be answered are:
Does the challenged measure arbitrarily or
unjustifiably discriminate between countries
where same conditions prevail?
Does it constitute a “disguised restriction on
trade”?
In the Shrimp-Turtle case, it was held that
whereas the US measure qualified for
provisional justification under Article XX(g),
it did not comply with the chapeau

Exceptions to GATS obligations- Art XIV
Chapeau: Subject to the requirement that such
measures are not applied in a manner which
would constitute a means of arbitrary or
unjustifiable discrimination between countries
where like conditions prevail, or a disguised
restriction on trade in services, nothing in this
Agreement shall be construed to prevent the
adoption or enforcement by any Member of
measures:
 List of exceptions (a) necessary to protect public morals or
maintain public order; (b) necessary to protect human,
animal or plant life or health protection; (c) necessary to
comply with Laws or regulations not inconsistent with GATS
provisions; (d) inconsistent with Article XVII (National
treatment) - if aimed at equitable taxation; and (e)
inconsistent with Article II (MFN) - to avoid double taxation.
US – Gambling: Invocation
04/20/11 of Arthttp://technolexindia.blogspot.com
www.technolexindia.com, XIV (a) by the US 192
Exceptions to GATT/GATS/TRIPS
obligations
Security Exception: Art. XXI of GATT; Art. XIV
bis of GATS and Art. 73 of TRIPS)
 No Member required to furnish information
contrary to security interests
 Member cannot be prevented from taking
action considered necessary to protect
essential security interests ... relating to
fissionable materials, traffic in arms,
ammunition, etc or taken in time of war or
other emergency or to pursue obligations
under United Nations Charter to maintain
international peace and security
Notification to the Council

Increasing Participation of Developing
Countries
Part IV of the GATT; Non-reciprocity principle
The Enabling Clause – Provides legal cover for
preferences granted to developing countries by
developed-country Members
 In the EC-GSP case, it was held by the Appellate Body that
the Enabling Clause did not require preference-giving
countries to extend the same benefits to all developing
countries and that it was permissible to distinguish
among developing countries on the basis of objective
criteria
 Under para 2(c) of the Enabling Clause, developed
countries can grant extensive and deeper preferences
to LDCs – EC’s “Everything but Arms” initiative
 Paragraph 44 of the Doha Ministerial Declaration: Concern
that SDT provisions are hortatory and not legally
04/20/11enforceable. Work proceeding
www.technolexindia.com, in the CTD Special 194
http://technolexindia.blogspot.com
Increasing Participation of Developing
Countries
Doha Development Agenda – Concerns of
developing countries placed at the heart of the
negotiations
LDCs exempted from undertaking obligations –
exemption from tariff and subsidy reduction
commitments. Not obliged to table offers in the
services negotiations
Less than full reciprocity in the NAMA negotiations
Paragraph 6 countries – do not have to apply the
formula but expected to increase the level of their
bindings and also bind tariffs at an average rate of
28.5 per cent
SDT provisions for SVEs, RAMS

Transparency
GATT Article X and GATS Article III
Publication of trade regulations
 (laws, regulations, judicial decisions and
administrative rulings of general application)
Uniform, impartial and reasonable administration
of rules / regulations
Independent legal review
Enquiry points under GATS, SPS and TBT
Agreements

Other principles
Regional Trade Agreements
GATT Art. XXIV: Free-Trade Areas and Customs
Unions
 “substantially all trade” among Members; “not on
the whole more trade-restrictive” measures
against third countries; limited transition period –
normally not to exceed 10 years
GATS Art. V:Economic Integration Agreements
 “substantial sectoral coverage; absence or
elimination of substantially all discrimination
Enabling Clause: Regional/Global Trading
Arrangements
 “purpose should be to create trade among
participating countries and not raise barriers to
the trade of third countries

Other principles
State Trading Enterprises and Monopolies
GATT Art. XVII: STEs
Allowed to have STEs but they
must respect the non-
discrimination principles and
operate in accordance with
commercial considerations
GATS Art. V: Monopolies
Allowed but should not operate
to undermine a Member’s
specific commitments
Measures to be Taken
• Developing countries cannot afford to be silent
spectators.
• THE DEVELOPING COUNTRIES MUST
COLLECTIVELY TAKE A STAND ON THE
FOLLOWING:-
• "Zero-tolerance" on agricultural subsidies
• Restoration of Quantitative Restriction:
• Multilateral Agreement Against
Hunger:
•
WHAT WE ALL NEED TO REMEMBER IS THE
FACT THAT
Pre-Independence India suffered repeated famines,
drought and food shortages. But following the Green
Revolution in the ’60s, yields and food stocks rose
manifold. Now, 40 years later, Indian farmers have
realised the follies of their tryst with intensive
agriculture. Despite 70 per cent of the population
being engaged in agriculture and allied activities,
declining food grain production and access to food
remain the two biggest problems confronting the
country. Liberalisation has made things worse:
commercial crops are eating into the fertile land
tracts meant for essential food grains.
And 16 years after the World Trade
Organisation came into existence; the
anticipated gains for India from the trade
liberalisation process in agriculture
04/20/11
are practically zero.
Conclusion &
Recommendations
India and China together constitute 1/3rd of the
total world population and 1/4th of world’s
skilled labour force. They are two future
economies to reckon with!

For a sustainable trade relationship between
the two nations facilitated by their interaction
with WTO, it’s imperative that they move
from competition to cooperation.

Some of our key recommendations are
discussed in the following slides.
Reduction in shipping costs: The Government
should try to provide an impetus to entrepreneurs
by providing subsidized shipping/ freight costs
while exporting or importing goods from either of
these countries.

Mutual Recognition Agreements (MRA) on

standards: For a meaningful trade relationship
between the two countries to flourish, all non-
tariff barriers need to be done away with.

Reduction in Tariffs: The markets in both these

countries should be made freely or almost freely
accessible to each other with a constant waive in
tariff rates. This would not only encourage
bilateral trade but also add to the
competitiveness of the products by making them
available at a cheaper price.
Emphasis on quality: Quality at an affordable
price always creates a value proposition that’s
difficult to challenge. So India should try to
increase their competitiveness in the Chinese
market by trying to provide an unparalleled value
proposition.

Increasing complementarities: There is a very

clear mismatch between China’s requirements
and India’s offerings. India should try to focus not
only on resource based and low technology
products but also move to medium and high
technology products. With cheap and skilled
labour, India would be able to take on all major
economies if it can bring itself at par with their
technologies.

Penetrate deeper: Penetrate deeper into their

markets and develop regional marketing
Product Diversification: Feed into each other’s
supply chain. Increase the variety of products
that are exchanged between the two countries.

Unique comparative advantages: Both India

and China have comparative advantages in
similar sectors such as chemicals, metals, alloys,
textile etc. This makes them highly competitive in
third country markets. Try not to intrude too
much into each other’s markets by splitting the
booty!

Foreign Direct Investments: Make themselves

more attractive FDI destinations by means of
further liberalization.

 A politically diplomatic stance: The political
scenario between two countries would always
play a major role in their trade interactions.
Hence a politically diplomatic stance is very
necessary even if they have opposing views on
tertiary issues such as their individual relation
with USA, UNO etc. Also it may be crucial to
resolve the long ongoing controversy regarding
each of their claims on Arunachal Pradesh.


Joint Ventures: To take trade cooperation to the

next level and build a cemented relationship, it
may be a great idea to create joint ventures in
certain areas that could lead to mutual benefit.
After all, it’s one common motive that both these
countries are working towards; an inclusive
growth and reduction in poverty while emerging
as global economic superpowers by next decade.

References
1. Bhatt, T.P.: India and China in WTO, 2006,Planning Commission Govt. of India,
Institute for Studies in Industrial Development, New Delhi- 110070
2. Rao, P.S (2008). International Business: Text and cases. 3rd ed. New Delhi:
Himalaya Publication. p340-520.
3. Goldhar, B. (2005). Impact on India of tariff and quantitative. ICRIER. 172 (1),
p10-12.
4. Anonymous. (2011). Tariff Rates: all products, China. Available:
http://tradingeconomics.com/china/tariff-rate-applied-weighted-mean-all-
products-percent-wb-data.html. Last accessed 24th Feb 2011.
5. Anonymous. (2011). Tariff Rates: all products, India. Available:
http://tradingeconomics.com/china/tariff-rate-applied-weighted-mean-all-
products-percent-wb-data.html. Last accessed 24th Feb 2011.
6. European commission trade. (2011). Economic Indicators, China. Available:
http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113366.pd
f. Last accessed 24th Feb 2011.
7. Min. of internal affairs, Japan. (2010). International Balance of Payment.
Available: http://www.stat.go.jp/english/data/handbook/c11cont.htm.
Last accessed 24th Feb 2011.
8. UN Commodity Trade. (2010). Database Statistics. Available:
www.comtrade.un.org. Last accessed 24th Feb 2011.
9. PRC General Administration. (2010). US-China Trade Statistics. Available:
http://www.uschina.org/statistics/tradetable.html. Last accessed 24th
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Dr.

CREATING WEALTH FROM

WTO Came into existence on 1-1-1995with the

Provide common institutional framework for

Ensuring full employment

Ensuring large and steadily growing volume of real income

Expanding the production of and trade in goods and

… seeking both to protect and preserve the environment

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Framework to further the objectives of the WTO Agreements

Forum for negotiations in matters dealt with under the WTO

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Framework to facilitate the implementation , administration

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Framework to administer the Trade Policy Review Mechanism

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Rule Based Free

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France Germany Spain Italy USA

1– Memories of the pre-war period: economic reason as

2– Victorious countries (US, Britain) were determined to

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• IMF was designed to take care of short term problems in

23 Founding member countries of the GATT:

GATT was introduced as a stepping stone towards

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1950 3% 11% 14% 18% 18% 23% 25% 26%

Table: Average tariff rates in selected countries on

1950 3% 11% 18% 18% 23% 25% 26%

1958 6% 10% 17% 15% 17% 19% 6%

The Round was divided into two phases:

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1958 Dillon Round 1968 Ext. Tariff Kennedy Round

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– Oil crisis (1973); World-wide “stagflation”(Crisis)

– Proliferation of non-tariff barriers during the early 1970s.

– Strained trade relations between the US, the EC and

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Table: Tariff changes in the Tokyo Round; averages,

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a) Trade barriers and related matters

b) Sector specific matters

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To establish a fair and market oriented

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