General Elimination of Quantitative Restrictions - Essay Example

1) Article XI*:General Elimination of Quantitative Restrictions 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. 2. The provisions of paragraph 1 of this Article shall not extend to the following: (a) Export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party; (b) Import and export prohibitions or restrictions necessary to the application of standards or regulations for the classification, grading or marketing of commodities in international trade; (c) Import restrictions on any agricultural or fisheries product, imported in any form,* necessary to the enforcement of governmental measures which operate: (i) to restrict the quantities of the like domestic product permitted to be marketed or produced, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported product can be directly substituted; or (ii) to remove a temporary surplus of the like domestic product, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported product can be directly substituted, by making the surplus available to certain groups of domestic consumers free of charge or at prices below the current market level; or (iii) to restrict the quantities permitted to be produced of any animal product the production of which is directly dependent, wholly or mainly, on the imported commodity, if the domestic production of that commodity is relatively negligible. Any contracting party applying restrictions on the importation of any product pursuant to subparagraph (c) of this paragraph shall give public notice of the total quantity or value of the product permitted to be imported during a specified future period and of any change in such quantity or value. Moreover, any restrictions applied under (i) above shall not be such as will reduce the total of imports relative to the total of domestic production, as compared with the proportion, which might reasonably be expected to rule between the two in the absence of restrictions. In determining this proportion, the contracting party shall pay due regard to the proportion prevailing during a previous representative period and to any special factors* which may have affected or may be affecting the trade in the product concerned. Brief Explanation of the Article XI: As the title suggests Article XI is concerned with the General Elimination of Quantitative Restriction from Trade. It goes on to say that a contracting party whether importing goods or exporting them shall maintain no prohibition or restrictions on them except in the form of duties, taxes and other charges that can be effective through quotas, import and export licences or other measures, Article XI advocates for the tariff regime to be put in place as trade measures. It further puts prohibition on either of the contracting parties for introducing fresh quotas and they are also required to eliminate the existing ones. However, it also lays a exception to the quantitative restrictions in case of certain domestic agricultural programs. I found the text of the Article XI by accessing the WTO website and in it the legal documents section of WTO. The URL that I accessed is < http://www.wto.int/english/docs_e/legal_e/gatt47_01_e.htm > 2) The cases decided by the WTO Dispute Panels and Appellate Body relating to the interpretation of Article XI are the following : Turkey - Textiles EEC - Imports from Hong Kong. India - Quantitative Restrictions US - Wool Shirts and Blouses EC - Hormones Canada - Periodicals US - Shrimp EC - Asbestos United States - Section337 of the Tariff Act of 1930 Argentina - Hides and Leather Japan - Film Japan - Measures Affecting Consumer Photographic Film and Paper Korea - Various Measures on Beef US - Certain EC Products Japan - Trade in Semi-conductors It was decided by the WTO Disputes Panel in Japan - Trade in Semi-conductors, the wording of ArticleXI:1 is comprehensive: it applies 'to all measures instituted or maintained by a [Member] prohibiting or restricting the importation, exportation, or sale for export of products other than measures that take the form of duties, taxes or other charges.' The scope of the term 'restriction' is also broad, as seen in its ordinary meaning, which is 'a limitation on action, a limiting condition or regulation'(1) The WTO Disputes Panel on India - Quantitative Restrictions, examined the phrase "restrictions made effective through state-trading operations". In its analysis, which was subsequently not reviewed and decided against by the Appellate Body within the WTO, the Panel laid its thrust on the fact that imports effected through state-trading operations did not necessarily mean that imports were being restricted: "In analyzing the US claim, we note that violations of Article XI:1 can result from restrictions made effective through state trading operations. This is made very clear in the Note Ad ArticlesXI, XII, XIII, XIV and XVIII, which provides that 'Throughout ArticleXI, XII; XIII; XIV; and XVIII, the terms 'import restrictions' or 'export restrictions' include restrictions made effective through state-trading operations.' It should be noted however, that the mere fact that imports are effected through state trading enterprises would not in itself constitute a restriction. Rather, for a restriction to be found to exist, it should be shown that the operation of this state trading entity is such as to result in a restriction(2) I retrieved this information from the WTO website, by accessing the publication section in the website. The relevant URL that I accessed was < http://www.wto.org/english/res_e/booksp_e/analytic_index_e/gatt1994_05_e.htm#fnt566 > 3) According to University of South Carolina, Indonesia Trade Journal the following interpretation of Article XI GATT is given "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." According to the Bond Law Review "Measures taken by countries for the attainment of environmental objectives may violate the GATT Article XI. A case in point is Canada]Measures Affecting Exports of Unprocessed Herring and Salmon.20 In this case, the US alleged that Canada's prohibition on the export of unprocessed pink and sockeye salmon and herring contravened Article XI and was intended to protect domestic fish processors by preventing foreign competitors from gaining access to Canadian fish. Canada claimed that the measures were an integral and long]standing component of its fisheries conservation and management regime, and were thus justified under Article XI paragraph 2(b) and Article XX (g). It was significant that the export prohibitions did not limit access to herring and salmon supplies in general and that the purchase of unprocessed fish was limited in the cases of foreign purchasers only - not in the cases of domestic processors and consumers. It was on the basis of this information that the Panel found that, since the prohibition applied to all unprocessed salmon and herring, the Canadian argument that the prohibition was necessary to prevent the export of unprocessed salmon and herring not meeting its quality standards did not stand. Thus, the export prohibitions could not be considered 'necessary to the application of standards' within the meaning of Article XI 2(b), nor could they be considered to consist of 'regulations for the marketing' of the goods in international trade within the meaning of Article XI 2(b). Countries which impose export restrictions while tackling the uncontrolled exploitation of natural resources may violate their GATT obligations under Article XI. In developing countries, the government might want to use such restrictions to make sure of the availability of domestic resources, or to stop the uncontrolled exploitation of those resources. This situation is illustrated by the Indonesian measures which were imposed in 1986 to restrict the export of unprocessed rattan and proposed for imposition on semi]processed rattan from 1 January 1989.21 The measures were imposed in an attempt to prevent the uncontrolled exploitation of forest resources and to address shortages in the availability of rattan. The EU raised the matter in GATT, expressing its concern that the prohibition on exports did not conform to GATT Article XI ".(Bond Law Review Volume 17, Issue 2 2005 Article 1Trade-Environment Nexus in Gatt Jurisprudence: Pressing Issues for Developing Countries By Shawkat Alam _Macquarie University) < http://epublications.bond.edu.au/cgi/viewcontent.cgiarticle=1302&context=blr > The first article talks about the impending tariff regime that Article XI implements and the second article raises concerns about the environmental issues in the light of Article XI, GATT. 4) Judgment of the Court of Justice, International Fruit Company, Joined Cases 21 to 24/72 (12 December 1972) The International Association of Independent Tanker Owners andOthers, Case No. C-308/06, Decided by the European Court of Justice.( 2008-06-03) Biret International v Council, Case No.C-93/02 P, Decided by the European Court of Justice (2003-05-15) Etablissements Biret & Cie v Council, Case No. C-94/02-P, Decided by the European Court of Justice (2003-05-15) I found this information from the European Court of Justice website. < http://curia.europa.eu/jurisp/cgi-bin/form.pllang=en&newform=newform&alljur=alljur&jurcdj=jurcdj&jurtpi=jurtpi&jurtfp=jurtfp&alldocrec=alldocrec&docj=docj&docor=docor&docop=docop&docav=docav&docsom=docsom&docinf=docinf&alldocnorec=alldocnorec&docnoj=docnoj&docnoor=docnoor&typeord=ALL&docnodecision=docnodecision&allcommjo=allcommjo&affint=affint&affclose=affclose&numaff=&ddatefs=&mdatefs=&ydatefs=&ddatefe=&mdatefe=&ydatefe=&nomusuel=&domaine=&mots=Article+XI+GATT&resmax=100&Submit=Submit > Foot Notes: 1. GATT Panel Report on Japan - Semi-Conductors, para. 104. 2. Panel Report on India - Quantitative Restrictions, paras. 5.134-5.135. Works Cited WTO < http://www.wto.int/english/docs_e/legal_e/gatt47_01_e.htm > WTO : < http://epublications.bond.edu.au/cgi/viewcontent.cgiarticle=1302&context=blr > < http://curia.europa.eu/en/transitpage.htm > Read More