As a general rule, the GATT is built upon the principles non- discrimination in the form of National Treatment (NT) and Most Favoured Nation (MFN) principles which are the bedrock of International trade rules or requirements under the GATT.
Within the GATT Article I relates to MFN, Article II to Tariff concessions, and Article III to National Treatment. In relation to the dispute between higher tariffs or customs duties applied by the US as towards a Swedish Company the MFN principle comes into play as it relates to discrimination among two member states and National Treatment is comes into play where US (or any other Member state) discriminates against foreign products. These principles suggest that a WTO member needs to pay close attention the role of intent, effect and comparisons2 of the discrimination they have put in place in regards to another WTO member state and their produce to be exported. Close attention is and determination of is needed to be given to “like” products and “directly competitive or substitutable” products envisaged under GATT Article’s I and Article III.3 which Of course, if the member state is able to justify their restrictive action before/of the DSU as envisaged under the exceptions Article xx USshrimp, then the restrictive measure will not be deemed to be discriminatory for the purposes stated within the article. To add the requirement of non- discrimination, the basic obligations to tariff commitments under GATT Article II:1 (a) “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.” Therefore, in regards to the current case, the US may be breaching GATT rules by applying higher tariffs as towards the Swedish company, applying the above article. Secondly, now that we have established that the principles of non-discrimination are the cornerstone of the requirements under the GATT, we need to ascertain whether US decision of applying higher customs tariffs on goods exported are incompatible WTO law and what the likely outcome would be for the Swedish company to succeed with its claim before a court in the US and EU respectively.
Comments