Tariffs

1
Tariffs

• Tariffs protect local industries
• Without them, all cars (for example) would be
  made in Korea
• Tariffs provide government with revenue
• Tariffs reduce global competitiveness of domestic
  industries
• Tariffs prompt retaliatory response

2
Why a multilateral agreement on tariffs?

• Country-specific bilateral agreements can be
  undercut by more favourable agreements with other
  countries
• Leads to Most Favoured Nation - promise to treat
  all countries the same
• Non-tariff barriers less visible from outside the
  country, so harder to negotiate about
• Negotiate about tariffs, eliminate non-tariff
  barriers

3
Article I.1 GATT MFN

• With respect to customs duties and charges of
  any kind imposed on or in connection with
  importation or exportationany advantage, favour,
  privilege or immunity granted by any contracting
  party to any product originating in or destined
  for any other country shall be accorded
  immediately and unconditionally to the like
  product originating in or destined for the
  territories of all other contracting parties

4
Article III.2 GATT - national treatment

• The products of the territory of any
  contracting party imported into the territory of
  any other contracting party shall not be subject,
  directly or indirectly, to internal taxes or
  internal charges of any kind in excess of those
  applied, directly or indirectly, to like domestic
  products.

5
Article XI GATT - elimination of non-tariff
barriers

• No prohibitions or restrictions other than
  duties, taxes or other charges, whether made
  effective through quotas, import or export
  licences or other measures, shall be instituted
  or maintained by any contracting party on the
  importation of any product of the territory of
  any other contracting party or on the exportation
  or sale for export of any product destined for
  the territory of any other contracting party.

6
Article XX GATT - general exceptions

• If not applied in a manner which would
  constitute a means of arbitrary or unjustifiable
  discrimination between countriesor a disguised
  restriction on international trade, its OK to
  regulate (among others)
• public morals
• human, animal or plant life or health
• products of prison labour..

7
Article XX GATT - general exceptions (contd)

• national treasures of artistic, historic or
  archaeological value
• conservation of exhaustible natural resources if
  done in conjunction with restrictions on domestic
  production or consumption (Art XX(g))

8
Brief history of GATT/WTO

• Post WWII creation of bodies like UN, IMF, World
  Bank, was intended to include ITO
• UNESCO Conference 1946 led to Havana Charter 1948
• Abandoned
• GATT 1947 a temporary bridging agreement until
  creation of ITO settled
• Binding of tariffs - agreed ceilings on an MFN
  basis (Art II)

9
Brief history of GATT/WTO (contd)

• Regular review of interconnections - negotiating
  rounds
• Uruguay Round ran from 1986-1994
• GATT 1994/WTOA finally signed in Marrakesh on
  15/4/94
• WTO from 1/1/95

10
WTO not just tariffs

• Three Ministerial Conferences Singapore (1996),
  Geneva (1998), Seattle (1999)
• Committees and Working Groups (some)
• Trade and Environment
• Trade and Development
• Trade and Investment
• Interaction between Trade and Competition Policy
• Transparency in Government Procurement

11
Trade Policy Review Body

• TPRB oversees national trade policies
• Countries/regions with largest shares of world
  trade (EU, Japan, US and Canada) reviewed every
  two years
• Others less frequently
• Report card issued by TPRB
• Australias most recent review 2 July 1998

12
WTO

• Decision making in WTO is by consensus - one
  country one vote (Art IX WTOA)
• DSU - Dispute Settlement Understanding - Annex 2
  to WTOA
• Dispute settlement by Dispute Settlement Body
  (DSB)

13
Dispute Settlement Body (DSB)

• Articles XXII and XXIII GATT 1947 -
  nullification or impairment
• Breach is prima facie nullification or
  impairment - Art 3.8 DSU
• Appellate review by Appellate Body (Art 17)