LAWS0255 International Trade Law

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LAWS0255 International Trade Law

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LAWS0255 International Trade Law

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Course Code: LAWS0255
University: University College London is not sponsored or endorsed by this college or university

Country: United Kingdom


Read the case scenario presented below and identify the main legal questions at issue. After carefully reading the respective claims put forward by the concerned states, choose one of the following roles: Complainant, Respondent or Panel and write a report underlying the main legal claims by references to case law and relevant bibliography.
Case: A Healthy Lifestyle (Banin v Athea)
Factual Background
1. Athea is a WTO member (considered as a developing member state) which has established trade relations with several other countries around the world. Athea has also joined the Regional Free Trade Association (RFTA) an agreement between regional partners that grants specific trade advantages to the respective member states including the free movement of goods.
2. Due to an increase in the spread of Non-Communicable Diseases (particularly of those diseases linked to smoking) Athea has started a campaign on different fronts to address the problem. Athea has signed and ratified the World Health Organisation (WHO) Framework Convention on Tobacco Control (FCTC), which includes plain packaging in its guidelines. As part of this campaign, the country’s authorities have decided to adopt a series of regulations concerning a standardised packaging of cigarettes.
3. Plain packaging regulations require the removal of all types of branding (colours, imagery, corporate logos and trademarks), allowing manufacturers to print only the brand name in a mandated size, font and position on the pack. Tobacco companies willing to export to that market have to comply with these new packaging regulations.
4. Companies incorporated in Banin, another WTO member, have complained to the Trade Office about plain packaging arguing that the measure constitutes a restriction on trade. After analysing the case, Banin has brought the dispute to the WTO.
5. In turn, Capadocia (another WTO member state) and a state party to the RFTA has protested about the plain packaging measures before the Secretariat requesting for consultations. In order to avoid problems with its neighbouring partner, Athea has exempted cigarettes produced in Capadocia from complying with the plain packaging regulations.
Legal Claims
6. After unsuccessful consultations with Athea, Banin brings a case to the DSB asserting that the regulations are inconsistent with Athea’s WTO obligations under the GATT 1994 and the Technical Barriers to Trade (TBT) Agreement.
7. With respect to the GATT 1994, Banin submits that the internal regulations are inconsistent with Article I:1 of the GATT 1994 because it provides less favourable treatment to products imported from Banin than to like products from Capadocia.
8. Athea submits that the internal regulation are justified under one of the subparagraphs of Article XX of the GATT 1994 and that they meet the requirements of the chapeau of Article XX.


Role of Panel
In the given case study the present issue is related with the laws and regulations of the member of the (GATT) general agreement on Tariffs and Trade. The primary objective of this Act is to promote the business among the several countries of the world by reducing the trade obstacles.
In the given study, Athea is the member of the WTO (World trade organization), due to increasing deceased by cigarettes; Athea has signed and approved the world trade health organization framework convention on Tobacco control, which included the plain packaging in its guidelines. Therefore all the countries have to adopt the guidelines. Under this guideline, the packaging of the cigarettes must be in the simple form and proper font size. No trademark, colour and logo can be put on the packaging. With this regards, another member of the WTO named as Banin, made the complained to the trade office that this is considered as the restriction on the trade. Along with Banin, one more member of the world trade organization named as capadocia protested about the plain packaging of the cigarettes. Due to the problems with the neighbouring partners, Athea has exempted cigarettes produced in Capadocia for the compliance with the plain packaging requirement.
The Banin bring the case to dispute settlement body and contented that the regulations made by the Athea was inconsistent with the obligation of the Athea under the GATT 1994 and the technical barrier to trade agreement. As per the obligations of the members of the GATT, the measures related with the technical standard, qualification requirement, requirement of the licence is not regarded as the unnecessary barrier of trade. It is based on the objective and transparency requirement and for ensuring the quality of the product.  The technical barrier of trade agreement stated that the regulations, guidelines, standards, assessment procedure should not create the unnecessary hurdles for the trade. However at the same time, it make out that the members of the WTO has a right to implement all measures, standard and regulations for safeguarding the human health, safety, protection of the environment. The main objective of this agreement is to enhance the international trade by considering the transparency provisions. On the basis of the above provision of the GATT and technical barriers to trade it has been concluded that the regulations made by the Athea for the simple packaging of cigarette is not the varying with the responsibility under the GATT and the technical barrier to trade agreement. As for the security of health and protection of the human, unnecessary promotion through the packaging can be prevented.
Another issue submitted by the Banin is that the internal regulations are inconsistent with article of the GATT as it provides less favourable treatment to products imported from other country as compare with the similar product imported from Capadocia. According to the article II of the GATT, any steps or guidelines covered under the agreement must be equally applicable to all the other members immediately and unconditionally. No member of the GATT should be treated less favourable as compare with the other member of the GATT. The provision of the agreement must not construct in such a way by which any other member can get the advantage. On the basis of the provision contained in the article II, it has been seen that the internal regulation applied by Banin are inconsistent with the provision contained in the Article. The Banin exempted the duty on cigarette manufactured in Capadocia for the compliance of the packing guidelines. With regards to the tariff all the countries must be equally treated. Due to the exemption of duty, Capadocia can get the advantage and leads to the lower cost of the product. Therefore the cigarette imported from Capadocia has the low cost as compare with any other country member. All the activities leads to the favourable treatment for Capadocia as compare with the other members of the world trade organization.
Another issue is that Athea contented that according to article XX of the GATT, internal regulations are justified and they encounter the obligation of the Article XX.  The article XX specify the conditions in which the members may be exempted from the compliance of the rules made under GATT. Members of the WTO can apply the policy which is inconsistent with rules of the GATT, which is essential for protection of the human, environment and animal. However the article is not applicable where the unjustified treatment made with the countries even if the same conditions prevail. In other words it can be say that implementation of the article does not leads to the unfair discrimination. In the legal case of Brazil-Retreaded Tyres, Brazil make the prohibition on the import of the Retreaded tyre, after considering all the facts the court held that the import ban applied in a manner which leads to unjustifiable treatment with the other countries. Therefore ban on the import of used tyre is not justifiable according to the article XX of the GATT. Moreover it can be say that Article XX represents the acknowledgement by the members of the world trade organization to preserve the balance between the right of member for implementing the exception and the right of all the other members of GATT (general agreement on tariff and trade).In the present study, Athea exempted the duty on the Cigarette only in the Capadocia, for the compliance of the packaging requirement. The same conditions for the packaging requirement implemented on the other countries but the Athea by giving the exemption to Capadocia make the unfair discrimination with the other countries. As per the article XX, members may be exempted for the compliance of the rules made under general agreement on trade and tariff. However in this case Article XX not applicable because it leads to unfavourable treatment along with the unjustified treatment with the other members of the WTO . Therefore submission by the Athea not gets succeed.
Baldwin, R.. “The World Trade Organization and the future of multilateralism.” Journal of Economic Perspectives30.1 [2016]:Pp 95-116.
DAILY, J., F. SCOTT K., and ARTHUR E. W. JR. “Introduction.” Perspectives on Financing Innovation. (Routledge, 2014). Pp13-16.
Harris, R. and Gillian M. “GATT Article XX and Human Rights: What Do We Know from the First 20 Years.” Melb. J. Int’l L. 16 [2015]. p 432.
Matsushita, M., et al. The World Trade Organization: law, practice, and policy. (Oxford University Press, 2015).
McGovern, E.. International trade regulation. Vol. 2. (Globefield Press, 2018).
Rodrik, D.. “What Do Trade Agreements Really Do?.” Journal of Economic Perspectives 32.2 [2018]: Pp 73-90.
Van den B., P. and Denise P. Essentials of WTO law. (Cambridge University Press, 2016).

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