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To what extent can and should the regulatory purpose underlying a challenged national measure be considered when analysing whether GATT Article III has been bre - Essay Example

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To what extent can and should the regulatory purpose underlying a challenged national measure be considered when analysing whether GATT Article III has been bre

The most recent, the Uruguay Round, addressed issues such as tariffs, services, and the trade related aspects of intellectual property and investment measures. The Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations was signed in April 1994. The Uruguay Round agreement was approved and implemented by the U.S. Congress in December 1994, and went into effect on January 1, 1995. The implementing legislation, known as the Uruguay Round Agreements Act, was passed in December, 1994.
In any federal regime dedicated to maintaining open markets - whether it is the GATT/WTO regime to liberalize trade between WTO member states, or the European Community (EC) regime to create free trade between EC member states, or the United States regime to maintain an open market among its fifty U.S. states - experience teaches that domestic regulations enacted by member states sometimes have a negative impact on trade. In some cases the negative trade effects are unintended, but on other occasions it has been clear that member states are using domestic regulations to give local producers a competitive advantage. The WTO inherited a basic structure of policing rules from the 1947 GATT agreement. The core GATT provisions for this purpose are the two-step set of rules in Articles III and XX. Article III governs "internal" taxes and regulations - those taxes and regulations that apply to imports after the imports have cleared customs and entered domestic commerce. The general rule of Article III is that internal taxes and regulations must treat imports no less favourably than like domestic products - an anti-discrimination rule known in GATT parlance as the "national treatment" principle. If a domestic regulatory measure is found to discriminate against imports in violation of Article III, the regulating government can seek to justify that discrimination by proving that it is necessary to the achievement of some legitimate regulatory purpose.
GATT Article III - National Treatment on Internal Taxation and Regulation
Article III of the GATT is about the National Treatment on Internal Taxation and Regulation. The detailed description about the Article III is as follows:
1. The contracting parties recognize that internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production2.
2. 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 other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products. Moreover, no contracting party shall otherwise apply internal taxes or other internal charges to imported or domestic products in a manner contrary to the principles set forth in paragraph 1.*
3. With respect to any existing internal tax which is inconsistent with the provisions of paragraph 2, but which is specifically authorized under ...Show more

Summary

The General Agreement on Tariffs and Trade (GATT) was first signed in 1947. The agreement was designed to provide an international forum that encouraged free trade between member states by regulating and reducing tariffs on traded goods and by providing a common mechanism for resolving trade disputes1…
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To what extent can and should the regulatory purpose underlying a challenged national measure be considered when analysing whether GATT Article III has been bre essay example
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