mfn_flashcards

Question 1

What are the three core principles of the GATT/WTO highlighted in the presentation?

Answer 1

Most-Favoured-Nation (MFN) treatment under Article I, National Treatment under Article III, and Tariff Concessions under Article II.

Question 2

What does the MFN obligation prohibit?

Answer 2

It prohibits discrimination among trading partners by requiring any advantage given to one country’s like products to be extended immediately and unconditionally to all other Members’ like products.

Question 3

What does the National Treatment obligation prohibit?

Answer 3

It prohibits discrimination against foreign products in favour of domestic products.

Question 4

What is a tariff concession?

Answer 4

A tariff concession is a commitment by a Member to reduce a tariff rate to a certain bound level.

Question 5

How does the presentation distinguish MFN from National Treatment?

Answer 5

MFN asks whether a country is favouring some foreign countries over others; National Treatment asks whether a country is favouring itself over foreign countries.

Question 6

State the key language of GATT Article I:1 in simple terms.

Answer 6

Any advantage, favour, privilege, or immunity granted to a product from one country must be given immediately and unconditionally to like products from all other WTO Members.

Question 7

What is the four-tier test for consistency with Article I:1 of GATT 1994?

Answer 7

1) Is the measure covered by Article I:1? 2) Does it grant an advantage? 3) Are the products like products? 4) Is the advantage accorded immediately and unconditionally to all like products?

Question 8

What kinds of measures are covered by Article I:1?

Answer 8

Both border measures and internal measures, including customs duties, import/export charges, payment transfer charges, methods of levying duties, import/export rules and formalities, internal taxes, and laws affecting sale, purchase, transportation, distribution, or use.

Question 9

Give examples of border measures covered by Article I:1.

Answer 9

Customs duties, import surcharges, export duties, tariff quotas, import licences, import/export prohibitions or quotas, and customs formalities.

Question 10

Give examples of internal measures covered by Article I:1.

Answer 10

Internal taxes and internal regulations affecting sale, offering for sale, purchase, transportation, distribution, or use of products.

Question 11

What are import surcharges?

Answer 11

Charges imposed on imported goods in addition to established tariffs.

Question 12

What are export duties?

Answer 12

Customs duties paid in the exporting country on exported goods.

Question 13

What are customs fees in this context?

Answer 13

Taxes or charges levied on imports, such as excise duty or import VAT, other than tariffs.

Question 14

Is the scope of Article I:1 unlimited?

Answer 14

No. Its scope is broad but not unlimited; for example, measures outside Article III:2 and III:4, such as certain domestic producer subsidies under Article III:8(b), also fall outside Article I:1.

Question 15

What did the panel in EC – Commercial Vessels (2005) clarify about Article I:1?

Answer 15

That domestic producer subsidies covered by Article III:8(b), being outside Article III:2 and III:4, are also outside the scope of Article I:1.

Question 16

How broadly is the term ‘advantage’ interpreted under Article I:1?

Answer 16

Very broadly. Because Article I:1 uses the word ‘any’, case law treats advantage as covering any measure that creates more favourable competitive opportunities or affects commercial relationships between products of different origins.

Question 17

What test for ‘advantage’ did the panel in EC – Bananas III (1997) use?

Answer 17

A measure grants an advantage if it creates more favourable competitive opportunities or affects the commercial relationship between products of different origins.

Question 18

Why were the EU banana licensing rules in EC – Bananas III considered an advantage?

Answer 18

Because traditional ACP bananas received more favourable quota allocation and less burdensome procedural requirements than third-country and non-traditional ACP bananas.

Question 19

What were the operator category quota allocations in EC – Bananas III?

Answer 19

Operators marketing third-country and/or non-traditional ACP bananas received 66.5% of quota allocation, while operators marketing EC and/or traditional ACP bananas received 30%.

Question 20

What were the activity function allocations in EC – Bananas III?

Answer 20

57% to primary importers, 15% to secondary importers, and 28% to ripeners.

Question 21

What additional burden was imposed on third-country and non-traditional ACP banana importers in EC – Bananas III?

Answer 21

They had to submit substantially more data to show entitlement to a licence than importers of traditional ACP bananas.

Question 22

What did the Appellate Body hold in Canada – Autos (2000) about Article I:1?

Answer 22

That Article I:1 applies broadly to any advantage, any product, and like products from all other Members, reinforcing the wide reach of MFN.

Question 23

What three conditions had to be met for import duty exemption in Canada – Autos?

Answer 23

1) Base-year production in Canada of vehicles of the imported class; 2) ratio requirements comparing local production to local sales, with at least 75:100; 3) Canadian value added equal to or greater than the base year amount.

Question 24

What happened in Colombia – Ports of Entry (2009)?

Answer 24

Colombia required advance import declarations and advance payment of duties and taxes for textiles, apparel, and footwear from Panama, but not for like goods from other countries, thereby granting an advantage to imports from countries other than Panama.

Question 25

Can a Member balance less favourable treatment in one respect with more favourable treatment in another to avoid violating Article I:1?

Answer 25

No. The panel in US – MFN Footwear (1992) rejected such balancing.

Question 26

Why is the concept of 'like products' important in Article I:1?

Answer 26

Because MFN discrimination only arises between like products; products that are not like may be treated differently without violating Article I:1.

Question 27

Is 'like products' defined in the GATT 1994?

Answer 27

No. The concept is used in several provisions but is not expressly defined in the GATT.

Question 28

What three main interpretation questions arise for 'like products'?

Answer 28

1) Which characteristics matter? 2) How similar must the products be? 3) From whose perspective is likeness judged?

Question 29

What does the presentation mean when it says the scope of likeness 'stretches and squeezes'?

Answer 29

The meaning of 'like products' varies by provision and context; it is not fixed across the WTO agreements.

Question 30

How has the Appellate Body described the likeness inquiry under Article III?

Answer 30

As fundamentally a determination about the nature and extent of the competitive relationship between and among products.

Question 31

Why is 'like products' in Article III:2, first sentence construed narrowly?

Answer 31

Because Article III:2, second sentence separately covers 'directly competitive or substitutable products'; reading 'like products' broadly would make the second sentence redundant.

Question 32

What happened in Spain – Unroasted Coffee (1981)?

Answer 32

Spain changed its tariff classification for unroasted coffee, giving duty-free treatment to some types and 7% ad valorem duty to others, including types mainly exported by Brazil.

Question 33

What was Brazil's complaint in Spain – Unroasted Coffee?

Answer 33

Brazil argued that the coffee varieties subject to 7% duty were like the coffee varieties receiving duty-free treatment, so Spain was discriminating in violation of Article I:1.

Question 34

What criteria did the panel use in Spain – Unroasted Coffee to assess likeness?

Answer 34

Physical characteristics, end-use, and tariff regimes of other Members.

Question 35

How did the panel treat physical differences among coffee varieties in Spain – Unroasted Coffee?

Answer 35

It found that differences in organoleptic properties like taste, smell, and aroma were not enough to make the products unlike.

Question 36

What did the panel say about end-use in Spain – Unroasted Coffee?

Answer 36

Unroasted coffee was mainly sold in blends and universally regarded as a single product intended for drinking.

Question 37

Why did other Members' tariff regimes matter in Spain – Unroasted Coffee?

Answer 37

Because no other contracting party classified different types of unroasted, non-decaffeinated coffee under different tariff rates, supporting the conclusion that they were like products.

Question 38

What additional criterion is now definitely relevant to likeness according to the presentation?

Answer 38

Consumers' tastes and habits, also called consumers' perceptions and behaviour.

Question 39

What did the Appellate Body say in Philippines – Distilled Spirits (2012) about consumer perception?

Answer 39

Consumer perception is highly relevant to likeness and may extend beyond physical characteristics to consumers' tastes and habits.

Question 40

List the four main criteria a panel may examine in deciding whether products are like.

Answer 40

1) Physical characteristics; 2) End-uses; 3) Consumers' tastes and habits; 4) Tariff classification.

Question 41

Are non-product-related process and production methods (NPR-PPMs) traditionally relevant to likeness if they do not affect the product's physical characteristics?

Answer 41

Traditionally, no. Products made through environmentally unfriendly methods cannot be treated less favourably solely because of those non-product-related production methods.

Question 42

What does 'immediately' mean in Article I:1?

Answer 42

Without delay, at once, instantly. No time should lapse between granting an advantage to one product and extending it to all like products.

Question 43

What are the two views on 'unconditionally' noted in the presentation?

Answer 43

One view is that advantages cannot be conditioned on criteria unrelated to the product itself; another is that the key question is whether attached conditions discriminate with respect to origin.

Question 44

What did the panel in Indonesia – Autos (1998) say about 'unconditionally'?

Answer 44

It said that an advantage must not be made conditional on criteria not related to the imported product itself.

Question 45

What did the Appellate Body in Canada – Autos (2000) say about conditions attached to advantages?

Answer 45

Whether conditions violate Article I:1 depends on whether they discriminate with respect to the origin of products.

Question 46

What is the basic regional trade exception to MFN?

Answer 46

Customs unions and free trade areas are allowed under Article XXIV of GATT and the Understanding on the Interpretation of Article XXIV.

Question 47

What are the general and security exceptions mentioned in the presentation?

Answer 47

Article XX general exceptions and Article XXI security exceptions.

Question 48

What economic emergency exceptions to MFN are mentioned?

Answer 48

Safeguard measures under Article XIX and the Agreement on Safeguards, and balance-of-payments measures under Articles XII and XIV and the related Understanding.

Question 49

What frontier traffic exception is mentioned?

Answer 49

Under Article XXIV:3(a), advantages granted to adjacent countries to facilitate frontier traffic are not subject to Article I:1.

Question 50

What waiver mechanism can excuse departure from MFN?

Answer 50

Waivers under Article IX:3 of the Marrakesh Agreement, Article XXV:5 of GATT 1994, and the Understanding in Respect of Waivers of Obligations under GATT 1994.

Question 51

How are subsidies and anti-dumping measures mentioned as exceptions or special departures from MFN?

Answer 51

The presentation lists subsidies and countervailing measures under Article XVI and Article VI, and anti-dumping measures under Article VI, as contexts where differential treatment may arise.

Question 52

What is the Generalized System of Preferences (GSP)?

Answer 52

A system under which developed countries give unilateral, non-reciprocal preferential market access to products from developing countries to support their economic growth.

Question 53

Why was the GSP created?

Answer 53

To provide developing countries with preferential access to developed-country markets in order to spur economic growth.

Question 54

When was the GSP first adopted internationally?

Answer 54

In 1968 at UNCTAD II.

Question 55

What did the GATT do in 1971 regarding GSP?

Answer 55

It enacted a waiver to MFN permitting tariff preferences for developing country goods, initially limited to ten years.

Question 56

What is the Enabling Clause?

Answer 56

The 1979 GATT Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, which created a permanent exemption from MFN for certain preferential treatment for developing countries.

Question 57

How did the 1971 GSP decision describe the system?

Answer 57

As a system of generalized, non-reciprocal and non-discriminatory preferences beneficial to developing countries.

Question 58

What does paragraph 1 of the Enabling Clause permit?

Answer 58

It permits contracting parties to accord differential and more favourable treatment to developing countries without giving the same treatment to other contracting parties.

Question 59

What does paragraph 2 of the Enabling Clause specifically mention?

Answer 59

Preferential tariff treatment by developed countries for products originating in developing countries under the GSP.

Question 60

What does paragraph 3 of the Enabling Clause require?

Answer 60

That differential and more favourable treatment be designed and, if necessary, modified to respond positively to the development, financial, and trade needs of developing countries, and that it not impede MFN-based reduction or elimination of trade barriers.

Question 61

Under the GSP, who decides which countries and products receive preferences?

Answer 61

The preference-giving developed country unilaterally decides which countries and products are included in its scheme.

Question 62

Why is MFN central to WTO law from an exam perspective?

Answer 62

Because it is a foundational non-discrimination norm with a broad material scope, a structured four-part test, developed case law on advantage and likeness, and multiple carefully delimited exceptions.