III. Trade in Goods 货物贸易 A. History Of Contemporary International

Trade Law（当代国际法的历史发展） B. The World Trade Organization（世界贸易组织）

C. The GATT 1994（ 1994年关税与贸易总协定）

D. Multilateral Trade Agreements（多边贸易协定）

Website: http://www.wto.org http://www.mofcom.gov.cn

A. HISTORY OF CONTEMPORARY INTERNATIONAL TRADE LAW

1. The General Agreement on Tariffs and Trade

a. Created in 1947 at Geneva. b. GATT was both a framework of rules and

an institution. 1) The rules defined the way trade relations

were conducted between contracting states. 2) The institution was: a) A forum for trade negotiations. b) A mechanism for modifying and enforcing the

GATT rules.

2. Multilateral Trade Negotiations (MTNs) a. “Rounds” held regularly by the GATT c

ontracting states to negotiate trade concessions.

1) First five rounds (from 1947 to 1962) were devoted almost exclusively to tariff reductions.

2) Latter rounds expanded their agendas to non-tariff matters and the drafting of non-tariff codes.

a) The Kennedy Round (1962-1967). b) The Tokyo Round (1973-1979). c) The Uruguary Round(1986- 1994) d) The Doha Round (2001-2006?)

3. The Uruguay Round (1986-1994) was concerned with:

a. Creating a new World Trade Organization.

b. Adopting new special agreements (e.g., agriculture).

c. Expanding the GATT principles to new fields (e.g., services and intellectual property).

4. The Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations

a. Provided for the World Trade Organization to come into existence on January 1, 1995.

b. The Final Act is made up of three parts: 1) The formal Final Act — a one-page umbrella

agreement that introduces the other two parts. a) Requires signatories to submit the second

part to the appropriate authorities for ratification. b) Requires signatories to adopt the third part. 2) WTO Agreement and its Annexes. 3) Ministerial Declarations, Decisions ,and

Understandings agreed to during the course of the negotiations.

1. Structure of the WTO. 1) The main organs of the WTO are: a) Ministerial Conference. 1] Meets at least every other year. 2] Has five standing committees: a] Trade and development. b] Balance-of-payments restrictions. c] Budget, finance, and administration. d]Trade and environment. e] Regional Agreement.

B. The World Trade Organization

b) General Council. 1] Also functions as the WTO’s: a] Dispute Settlement Body. b] Trade Policy Review Body. 2] Responsible for making arrangements f

or effective cooperation with other IGOs. c) Council for Trade in Goods. d) Council for Trade in Services. e) Council for Trade-Related Aspects of In

tellectual Property Rights. 2) Other: Secretariat headed by a Director-

General.

2. Decision Making within the WTO. 1) Decision making is by consensus. a) Consensus defined: The making of a

decision by general agreement and in the absence of any voiced objection.

b) If consensus cannot be reached: decisions are made by a simple majority vote.

1] Each member has one vote. 2] The European Union has the

number of votes that its member states have that are WTO members.

e. Dispute Settlement f. Trade Policy Review. 1) WTO Agreement establishes a

Trade Policy Review Mechanism. a) Trade Policy Review Board

(TPRB) is the WTO’s auditor. 1] Carries out periodic reviews

of the trade policies and practices of member states.

2] Prepares an annual overview of the international trading environment. back

C. THE GATT 1994

1. Changes from the GATT 1947 2. Purpose of the GATT Rules 3. Direct Effect？ 4. Nondiscrimination 5. Protection through Tariffs 6. Transparency 7. Simplification 8. Regional Integration 9. Commodity Arrangements 10. The Escape Clause 11. Exceptions

1. Changes from the GATT 1947

a. Changes in text are mainly in terminology.

1) “Member” replaces “contracting party.”

2) The WTO or its Ministerial Conferences are substituted for “Contracting Parties.” back

2. Purpose of the GATT Rules a. To give WTO member states: 1) Equal access to markets. 2) Reciprocity in trade concessions. 3) Transparent and stable trading

conditions. b. Ultimately to progressively

liberalize world trade. back

3. Direct Effect？ a. Some GATT provisions are directly

effective. 1) Defined: Individuals (in addition to other

signatories) may rely on GATT provisions to challenge the actions of a contracting state.

2) Provisions that are directly effective: Those that prohibit a state from taking action contrary to the General Agreement are directly effective.

a) Individuals may only challenge provisions that require a contracting state to take some positive action if the state adopts implementing legislation authorizing such a challenge.

Case 7-1. FINANCE MINISTRY v. MANIFATTURA LANE MARZOTTO, S.p.A.

Italy, Court of Cassation (Joint Session), 1973.

FACTS: Italy imposed an “administrative services duty” on woolen goods that Manifattura Lane Marzotto (MLM) had imported from Australia. MLM then sued the government claiming that this duty violated Art. III(1)(b) of the GATT. The government moved to have the case dismissed, arguing that Art. III(1)(b) is not directly effective and that the Italian Parliament had not adopted implementing legislation.

ISSUE: Is GATT Art. III(1)(b) directly effective?

HOLDING: Yes. LAW: (1) GATT Art. III establishes the maximum

amounts of tariffs that contracting states can impose.

(2) Italy’s Law No. 195 of 5 April 1950, implementing the GATT in general, provided that the entire agreement was “fully and entirely implemented.”

(3) Treaty provisions that mandate that a state is not to act do not require the state to act to be fully implemented.

EXPLANATION: The GATT is fully part of Italy’s legal system. Because Art. III is a prohibition requiring the state not to act, there is no need for specific implementing legislation. It is directly effective and may be invoked by private persons.

ORDER: The duty charged MLM is illegal. back

4. Nondiscrimination: International trade should be conducted without discrimination

a. The basic “principle” of GATT. 1) Given expression in the articles as

the “most-favored-nation” rule and the “national treatment” rule.

b. The Most Favored Nation Rule:

Requires each contracting party to apply its tariff rules equally to all other parties.

Exceptions:

1) General exceptions to the MFN rule.

a) Contracting states may take actions to counter dumping and subsidization.

b) Contracting states may join together to create customs unions and free trade areas.

c) Contracting states may restrict imports to protect public health, safety, welfare, and national security.

2) Special exceptions to the MFN rule for developing contracting states.

a) Generalized System of Preferences (GSP) allows developing countries to export all (or nearly all) of their products into a participating developed country on a nonreciprocal basis.

b) South-South Preferences allows developing countries exchange tariff preferences among themselves without extending the same preferences to developed countries.

c. The National Treatment Rule: Requires a country to treat products equally with its own domestic products once they are inside that border.

1) Definition: “‘National treatment’ by a state means according to the nationals of another state treatment equivalent to that which the state accords to its own nationals.”

a) Interpretation: Products must be treated equally vis-à-vis their “content”; they may not be discriminated against because of the way in which they were made.

2) Exceptions: a)Contracting states may maintain prefer

ences that existed at the time they became signatories of the GATT.

b) Contracting states may discriminate in the procurement of goods by government agencies.

c)Contracting states may discriminate in the payment of subsidies to domestic producers.

d) Contracting states may discriminate in the screening of domestically produced movies. back

5. Protection through Tariffs: Contracting parties may only protect their domestic industries through the use of tariffs

a. Forbidden actions: 1) Use of quotas and other quantitative

restrictions that block the function of the price mechanism (Art. XI).

2) Tariffs be collected “at the time or point of importation” (Art. II).

a) Purpose: To ensure that internal taxes are not disguised as tariffs.

b. Exceptions — member may impose: 1) Temporary export prohibitions or restrictions

to prevent or relieve critical shortages of foodstuffs or other essential products.

2) Import and export restrictions related to the application of standards or regulations for classifying, grading, or marking commodities.

3) Quantitative restrictions on imports of agricultural and fisheries products to stabilize a member state’s national agricultural markets.

4) Reasonable quantitative restrictions to safeguard a member state’s balance of payments.

5) Quantitative restrictions to further the economic development of a developing member state. back

6. Transparency: Governments of WTO member states must disclose to the public, and to other governments, the rules, regulations, and practices they follow in their domestic trade systems back

7. Simplification: The members are obliged to work toward simplifying their import and export formalities

a. Customs Classification. 1) 1950 Convention on Nomenclature for

the Classification of Goods in Customs Tariffs.

a) Convention established the so-called Brussels “Harmonized System” (HS).

1] Goods are defined along a spectrum from raw to processed, with those being more fully processed subject to the highest tariff rates.

2] There is a schedule of about 900 tariff headings.

a] Each heading is interpreted through explanatory notes and classification opinions published and regularly updated by the CCC.

b] The notes and opinions are commonly incorporated into the tariff interpretation rules

used by states that have adopted the HS. back

8. Regional Integration a. GATT encourages regional integration

as a means of promoting international trade. b. Definitions: 1) Free trade area: An arrangement for

eliminating tariffs between two or more countries.

2) Customs union: An arrangement involving both the elimination of internal tariffs and the establishment of a common external tariff for member countries.

c. Limitations: 1) These agreements may “not raise

barriers to the trade of other contracting countries.”

a) The constituent member countries of a free trade agreement may not increase their tariffs with respect to nonmembers.

b) The common tariff created by a customs union cannot “be higher or more restrictive than the general incidence of the duties and regulations of commerce” before the customs union was established.

c) Interim agreements leading to either a free trade area or a customs union may not create “higher or more restrictive” tariffs or regulations.

d. Procedures. 1) Notification: Countries seeking to enter into a

free trade agreement or customs union must “promptly notify” the WTO of their intentions.

2) WTO working parties will examine the proposed agreement and a transition schedule to insure that they comply with GATT 1994 and make a report to the contracting parties.

3) The WTO Ministerial Conference reviews the report and either:

a) Approves the proposal, or b) Makes “recommendations” for modification. 1] Recommendations are actually demands to

make changes.

e. Effect of establishing a free trade agreement or customs union: The GATT rules apply to the union or area as a whole and not to its constituent states.

f. Note: Customs unions and free trade areas operate in many respects as a regional GATT.

1) They have their own tariff and non-tariff codes.

2) Examples: a) Canada-United States Free Trade

Agreement. b) European Union. back

9. Commodity Arrangements a. Purpose of commodity trade regulation:

To stabilize the production and supply of basic or “primary” commodities through the intergovernmental regulation of supply and demand.

1) Primary commodities. a)Defined (in general terms): 1] Derived by extraction: Such as

fuels and ores. 2] Obtained by harvest: Such as

foodstuffs and fish. 3] Require minimal industrial

processing before being used or consumed.

b) Commonly include: Bananas, bauxite, cocoa, coffee, copper, cotton and cotton yarns, hard fibers and their products, iron ore, jute and its products, manganese, meat, phosphates, rubber, sugar, tea, tropical timber, tin, and vegetable oils including olive oil, and oil seeds.

b. GATT 1994 rules. 1) Agreements regulating commodities

have to involve both: a) Exporting countries, and b) Importing countries. 2) Agreements have to be approved by the

WTO. c. Once established, an organization set up

to operate a commodity arrangement will operate independently of the WTO. back

10. The Escape Clause (or GATT “safety valve”): Allows a member state to avoid, temporarily, its GATT 1994 obligations when there is a surge in the number of imports coming from other member states

a. An injured member may impose emergency, restrictive trade measures.

b. Prerequisites: 1) It must notify the WTO of its action. 2) It must consult with the affected

exporting member state to arrange for compensation.

c. If a notifying country fails to negotiate, the injured exporting state is authorized to “retaliate.”

1) The injured state may withhold “substantially equivalent concessions” in order to restore the previous balance of trade between the two countries.

d. Procedures for engaging in consultations and for withholding concessions are set out in the Safeguards Agreement . back

11. Exceptions a. The GATT 1994 allows member states to

implement certain public policies that are in conflict with its general goal of liberalizing trade.

1) Two kinds of exceptions are allowed: a) General exceptions in Article XX. b) Security exceptions in Article XXI. b. General exceptions: Excuse a contracting

party from complying with its GATT obligations so long as this is not done as “a means or unjustifiable discrimination” or as “a disguised restriction on international trade.”

1) A state may take measures contrary to the General Agreement which:

a) Are necessary to protect public morals.

b) Are necessary to protect human, animal, or plant life, or health.

c) Relate to the importation or exportation of gold or silver.

d) Are necessary to secure compliance with laws or regulations that are not inconsistent with the General Agreement.

e) Relate to the products of prison labor. f) Protect national treasures of artistic,

historic, or archaeological value.

g) Relate to the conservation of exhaustible materials.

h) Are undertaken in accordance with an intergovernmental commodity agreement.

i) Involve restrictions on exports of domestic materials needed by a domestic processing industry during a period when the domestic price is held below world prices as part of a governmental stabilization plan.

j) Are essential to acquiring products in short supply.

c. Security exceptions allow contracting parties to avoid any obligation which is either:

1) Contrary to an essential security interest, or

2) In conflict with duties imposed by the United Nations Charter for the maintenance of international peace and security.

d. Most of the exceptions listed in Articles XX and XXI may be invoked only if they are “necessary” or “essential” to the contracting party.

4] United Nation’s actions to maintain international peace.

a] UN Security Council may impose sanctions upon states that threaten international peace.

(1) Sanctions can include bans on trade. back

D. MULTILATERAL TRADE AGREEMENTS

1. Customs Valuation Code 2. Agreement on Preshipment Inspection 3. Agreement on Technical Barriers to Trade 4. Agreement on the Application of Sanitary and Phytos

anitary Measures 5. Agreement on Trade-Related Investment Measures 6. Agreement on Import Licensing Procedures 7. Antidumping Code 8. Agreement on Subsidies and Countervailing Measure

s 9. Agreement on Safeguards 10. Agreement on Agriculture 11. Agreement on Textiles and Clothing 12. Agreement on Rules of Origin home

1. Customs Valuation Code a. Formal name: Agreement on the

Implementation of Article VII of the GATT 1994.

b. It establishes several methods for valuing items for customs purposes.

1) The primary method is the “transaction value” of the imported item: Tariffs are based on the price actually paid or payable for merchandise when sold for exportation.

2) The fall-back methods are (in order):

a) The transaction value of identical goods sold for export to the same importing country.

b) The transaction value of similar items sold for export to the importing country.

c) The deductive value or the price actually paid for the greatest number of units sold in sales to nonrelated persons in the importing country.

d) The computed value is derived from the sum of:

1] The cost or value of the materials, 2] The profit and overhead, and 3] Charges for handling, transportation,

and insurance. e) The derived value is determined by ap

plying whichever of the other methods best fits, and adjusting it to the particular circumstances.

Case 7-4. Orbisphere Corp. v. United States

Case 7-4. ORBISPHERE CORP. v. UNITED STATES

United States Court of International Trade, 1989 FACTS: Orbisphere, the plaintiff, imported oxygen a

nalyzers into the US. US Customs used the transaction value (the price of the goods at the time of their export) of the analyzers in determining the import duties that were due. It did so because it claimed the goods were sold for export by Orbisphere’s home office in Switzerland. Orbisphere said that the import duties should have been calculated using a deductive value, because the goods were sold by its subsidiaries in the US and so they had no price at the time they were exported to the US.

ISSUE: Should US Customs have valued plaintiff’s products using the deductive value instead of the transaction value?

HOLDING: Yes. LAW: US Code § 1401a defines “transaction

value” as “the price actually paid or payable for merchandise when sold for exportation to the US,” plus certain other costs and expenses. “Deductive value” is calculated depending upon “when and in what condition the merchandise concerned is sold in the US.”

EXPLANATION: All of the sales orders were solicited and received in the US sales offices of Orbisphere. None was ever received directly in Switzerland. The invoice listed the US office. Freight was charged to Orbisphere’s customers FOB from its US office. All payments were made to the US office. Moreover, Orbisphere and its subsidiaries are all US corporations; the office in Switzerland is not a separate entity.

ORDER: The deductive value is to be used in determining duties. back

2. Agreement on Preshipment Inspection: Allows developing WTO member states to carry out preshipment inspections to verify price, quantity, quality, customs classifications, and other characteristics of goods before the goods are shipped from other states.

a. Permissible purposes of preshipment inspection: To stop over- and under-invoicing and fraud in order to prevent the flight of capital and evasion of customs duties.

b. The preshipment inspection must comply with the basic GATT principles (nondiscrimination, transparency, etc.).

1) In order to reject a contract price, an inspecting state must follow certain guidelines, including:

a) Comparing prices for the goods being inspected only with the prices of identical or similar goods offered for export at about the same time and under comparable conditions of sale.

c. States where preshipment inspections are carried out must:

1) Comply with the basic GATT principles. 2) Must offer technical assistance to the d

eveloping states carrying out preshipment inspections. back

3. Agreement on Technical Barriers to Trade (TBT Agreement): establishes rules governing the way WTO member states draft, adopt, and apply technical regulations and standards

a. Purpose of TBT Agreement is to ensure that states:

1) Protect human life and the health of humans, animals, and plants.

2) Protect the environment. 3) Do not engage in deceptive practices. 4) Do not create unnecessary obstacles to

trade.

b. Definitions: 1) Technical regulations: Mandatory laws and provisions specifying: a) Characteristics of products. b) Processes and production methods for

creating products. c) Terminology, symbols, packaging, mark

ing, or labeling requirements for products, processes, or production methods.

2) Standards: Voluntary guidelines that specify the same things as technical regulations.

3) Conformity assessment procedures are any procedures used directly or indirectly to determine that the relevant requirements in technical specifications or standards are fulfilled, such as:

a) The sampling, testing, and inspecting of products.

b) Their evaluation, verification, and assurance of conformity; and

c) Their registration, accreditation, or approval.

c. Scope of the TBT Agreement. 1) Covered: All products, including agricult

ural and industrial products. 2) Not covered:

a) Purchasing specifications related to the production or consumption requirements of governmental bodies (which is covered by the Agreement on Government Procurement).

b) Sanitary and phytosanitary measures (which are covered by the Agreement on Sanitary and Phytosanitary Measures).

d. TBT Agreement requirements: 1) WTO member states must comply

with the basic GATT principles (nondiscrimination, transparency, etc.).

2) Central governments of WTO member states must take “reasonable measures” to ensure the local governments and nongovernmental organizations comply with the TBT Agreement. back

4. Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) defines the measures that WTO member states may take to protect the lives and health of humans, animals, and plants

a. Any measures taken must: 1) Not be disguised means of restric

ting international trade. 2) Not arbitrarily discriminate betwe

en states without justification. 3) Be based on scientific evidence.

Case 7-5. AUSTRALIA ‑ MEASURES AFFECTING IMPORTATION OF SALMON

World Trade Organization, Appellate Body, 1998

FACTS: Australia appealed from a Panel Report holding that Australia had violated Art. 5.5 of the WTO’s SPS Agreement by establishing unjustifiable distinctions in the levels of sanitary protection it required on imports of Pacific salmon as compared to imports of herring used as bait, and imports of live ornamental finfish.

ISSUE: Had Australia acted inconsistently with its obligations under Art. 5.5?

HOLDING: Yes. LAW: To show that a WTO member state has

acted inconsistently with Art. 5.5 the following must be proven: (1) the member state must have established different levels of protection (for comparable imports); (2) the levels of protection must exhibit differences that are “arbitrary or unjustifiable”; and (3) the differences must act as a “discrimination or disguised restriction on international trade.”

EXPLANATION: (1) Australia’s levels of sanitary protection for Pacific salmon were quite restrictive. Its levels of protection for herring and finfish were not so restrictive. The Panel in ascertaining Australia’s compliance with Art 5.5 could compare these different criteria because all of these fish involved “a risk of entry, establishment or spread of one disease of concern” in common.

(2) The risk to health presented by imports of salmon was no different than that from imports of herring or finfish. The diseases of concern are found in all of these fishes. Therefore, the different treatment was either arbitrary or unjustified.

(3) The different treatment adversely impacted international trade because: (a) it was arbitrary or unjustified, (b) it was applied substantially differently between similar imports, (c) it was at odds with the requirements of the SPS, (d) Australia had reversed its position on imports of Salmon, and (e) Australia took no internal actions to limit the movement of salmon.

ORDER: The Panel’s findings are upheld. back

5. Agreement on Trade-Related Investment Measures (TRIMs Agreement) is meant to promote foreign investment and eliminate provisions in foreign investment laws that distort or reduce international trade

a. States must accord foreign investors “national treatment.”

b. States may not impose quantitative restrictions on the use of foreign products by foreign-owned local enterprises. back

6. Agreement on Import Licensing Procedures seeks to insure that licensing procedures are neutral

a. Forms and procedures must be simple.

b. Licenses are not to be denied because of minor errors in completing an application.

c. Imports are not to be barred because of minor deviations in the value, quantity, or weight designated on the license. back

7. Antidumping Code a. Formal name: Agreement on

Implementation of Article VI of GATT 1994. b. Dumping defined: The introduction into

the commerce of another country of a product at less than its normal value.

c. Scope of Antidumping Code. 1) Dumping is not forbidden. 2) States may taken antidumping

measures to counter dumping only if: a) They conduct an investigation.

b)They determine that the dumped products cause or threaten to cause material injury to, or materially retard the establishment of, a domestic industry within the importing country.

3) Measures may include: a) Provisional antidumping duties

upon the making of a preliminary finding. b) Final antidumping duties upon the

completion of an investigation and a final determination that dumping, injury, and a causal link between them exist. back

8. Agreement on Subsidies and Countervailing Measures (SCM Agreement) specifies the actions a WTO member state may take to counterbalance an improper subsidy

a. Subsidy defined: A financial contribution made by a government or other public body that confers a benefit on an enterprise, group of enterprises, or an industry.

1) Examples of subsidies: a) Direct transfers of funds (e.g., grants, loans, and

equity infusions). b) Potential direct transfers of funds (e.g., loan

guarantees). c) Foregoing of revenue (e.g., tax credits). d) Providing goods or services (other than general

infrastructure). e) Conferring any form of income or price support.

b. Only “specific subsidies” are subject to the “disciplines” of the SCM Agreement.

1)Specific subsidies are subsidies that target:

a) A specific enterprise or industry. b) A group of enterprises or industries. c) Enterprises in a particular region. 2) The SCM Agreement does not apply to: a) Nonspecific subsidies. b) Certain specific subsidies mentioned in the S

CM Agreement (“nonactionable subsidies”). c) Agricultural subsidies (which are covered by t

he Agreement on Agriculture).

c. Categories of Specific Subsidies. 1) Prohibited subsidies (“red” subsidies) are

subsidies that either: a) Depend upon export performance, or b) Are contingent upon the use of domestic instead

of imported goods. 2) Actionable subsidies (“yellow” subsidies) are subsidies that are trade distorting because, in the way they are used, they:

a) Injure a domestic industry of another member state.

b) Nullify or impair benefits due another member state under GATT 1994.

c) Cause or threaten to cause “serious prejudice” to the interests of another member state.

3) Nonactionable subsidies (“green” subsidies) are subsidies that either:

a) Are not nonspecific. b) Are infrastructural subsidies that

involve government funding to: 1] Assist (but not fully cover) th

e cost of business research activities. 2] Aid disadvantaged regions. 3] Help existing facilities adapt t

o new environmental requirements.

d. Actions an injured state may take: 1) Do nothing. 2) Request consultations with the

subsidizing state. 3) Seek a remedy from the WTO. a) Must first seek consultation. b) May then refer the matter to the WTO

Dispute Settlement Body (DSB). 1] DSB will appoint a Panel to decide

(with the assistance of a Permanent Group of Experts) if a prohibited subsidy exists.

a] The Panel report may be appealed to the Appellate Body.

2] DSB will automatically adopt the Panel report (unless it decides by consensus not to).

a] The decision of the Appellate Body does not have to be adopted by the DSB but is automatically effective by itself.

3] If a member state does not comply with the DSB adopted Panel report or the Appellate Body decision, the DSB will authorize (unless it decides not to by consensus) the injured state to impose countervailing measures (i.e., a duty to offset the effect of the subsidy).

4) Independently impose countervailing duties.

a) Must follow the same procedures used for imposing antidumping duties.

Case 7-6. MUKAND LTD. v. COUNCIL OF THE EUROPEAN UNION

European Union, Court of First Instance (2001). FACTS: The EU Commission imposed countervailing

duties on imports of stainless steel bright bars (SSBBs) from India to offset subsidies being received by the Indian manufactures. The commission found that the subsidies caused material injury to EU undertakings. The Indian manufacturers appealed, arguing that EC producers of SSBBs arbitrarily imposed a surcharge to artificially increase the price of SSBBs and that this was the reason why the Indian SSBBs were less expensive.

ISSUE: Did the Commission err in making its determination to impose countervailing duties?

HOLDING: Yes. LAW: The EU Regulation of Subsidized

Imports requires the Commission to determine, before imposing countervailing duties, that (1) there has been a material injury, (2) the injury was caused by subsidized imports, and (3) the injury caused harm to an EU industry. Additionally, in making this determination, the Commission shall consider whether other “known factors” may have caused the injury, such as the restrictive trade practices of EU producers themselves.

EXPLANATION: It is clear, contrary to the Commission’s finding, that the price of SSBBs manufactured by EU producers was artificially high because of their use of an arbitrary surcharge formula. The Commission itself had found that the prices of related flat steel products had almost doubled because of a similar arbitrary surcharge.

ORDER: Commission order imposing countervailing duties is annulled.

e. Developing states and states transitioning to market economies.

1) Specific subsidies are to be phased out:

a) Least-developed states by 2003.

b) Developing states by 1999. c) Transitioning states until

2002. back

9. Agreement on Safeguards defines when WTO member states may adopt safeguard measures pursuant to Article XIX of GATT 1994

a. An official investigation must be conducted to determine:

1) A product is being imported into the territory of the investigating state.

2) The quantities must have increased sufficiently to cause or threaten to cause serious injury.

3) The injury must be to a domestic firm producing the same or directly competitive products.

b. The measures imposed must be applied to the imported product:

1) Regardless of its origin. 2) Only for the time and to the extent

necessary to prevent or remedy serious injury and to facilitate adjustment. back

10. Agreement on Agriculture establishes guidelines for “initiating a process of reform of trade in agriculture”

a. The provisions of the Agreement: 1) Specify the agriculture products it

governs. a) Many nonfoodstuffs are excluded. 2) Requires that nontariff barriers to

agricultural imports be converted into customs tariffs.

3) Defines permissible forms of domestic supports.

4) Defines export subsidies. 5) Phases in initial reductions in

tariffs, impermissible domestic support measures, and export subsidies during a six-year implementation period.

a) Developing countries are given ten years.

6) Progressively integrates international trade in agricultural products into the GATT system. back

11. Agreement on Textiles and Clothing provides for the phasing out over a ten-year period of the existing Multi-Fiber Arrangements that allow states to impose quantitative restrictions on imports of textiles and clothing

12. Agreement on Rules of Origin is a three-year program for bringing about the creation of an international system of harmonized rules of origin

a. The new rules will require WTO member states to comply with the basic GATT principles (nondiscrimination, transparency, etc.). back