WTO Disputes: India-Patent & Spain Coffee Cases - GATT & SPS Agreement Implications | Study notes International Trade Union Law

1. India- Patent case

Complainant: EC

Respondent: India

Provisions:

TRIPS

Art 70.8 requires WTO members to provide a means by which patent applications for pharmaceutical and

agricultural chemical products can be filed from the date of entry into force of the WTO Agreement. India's

patent law at the time did not allow for the filing of patent applications for these products until they had been

approved for marketing by the Indian government.

Art 70.9 requires WTO members to provide exclusive marketing rights for pharmaceutical and agricultural

chemical products that are subject to patent applications. India's patent law at the time did not provide for

exclusive marketing rights for these products.

Facts

The India-Patent case was a dispute between the European Communities (EC) and India at the World Trade

Organization (WTO). The EC alleged that India's patent law was inconsistent with the Agreement on Trade-

Related Aspects of Intellectual Property Rights (TRIPS Agreement), specifically Articles 70.8 and 70.9.

Arguments

The EC argued that India's patent law was inconsistent with these provisions of the TRIPS Agreement

because it prevented the holders of patent applications for pharmaceutical and agricultural chemical products

from obtaining marketing approval and from enjoying exclusive marketing rights for their products.

India argued that its patent law was consistent with the TRIPS Agreement because it allowed for the filing of

patent applications for pharmaceutical and agricultural chemical products and because it provided for a

mechanism for the grant of marketing approval. India also argued that the TRIPS Agreement did not require

WTO members to provide for exclusive marketing rights for pharmaceutical and agricultural chemical

products.

Panel

The WTO Dispute Settlement Body (DSB) ruled in favor of the EC in 1998. The DSB found that India's

patent law was inconsistent with Articles 70.8 and 70.9 of the TRIPS Agreement and that India was required

to amend its law to comply with these provisions.

Conclusion

India subsequently amended its patent law to comply with the DSB ruling. The amended law provides for

the filing of patent applications for pharmaceutical and agricultural chemical products from the date of entry

into force of the WTO Agreement and for the grant of exclusive marketing rights for these products.

2. EC-Hormones case

Complainant: US

Respondent: EC

Third Parties: Aus, Can, NZ, Norway

Provisions:

Art III, XI GATT

Art 2 TBT

Art 4 Agriculture

Art 2,3,5 SPS

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India- Patent case Complainant: EC Respondent: India Provisions: TRIPS Art 70.8 requires WTO members to provide a means by which patent applications for pharmaceutical and agricultural chemical products can be filed from the date of entry into force of the WTO Agreement. India's patent law at the time did not allow for the filing of patent applications for these products until they had been approved for marketing by the Indian government. Art 70.9 requires WTO members to provide exclusive marketing rights for pharmaceutical and agricultural chemical products that are subject to patent applications. India's patent law at the time did not provide for exclusive marketing rights for these products. Facts The India-Patent case was a dispute between the European Communities (EC) and India at the World Trade Organization (WTO). The EC alleged that India's patent law was inconsistent with the Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPS Agreement), specifically Articles 70.8 and 70.9. Arguments The EC argued that India's patent law was inconsistent with these provisions of the TRIPS Agreement because it prevented the holders of patent applications for pharmaceutical and agricultural chemical products from obtaining marketing approval and from enjoying exclusive marketing rights for their products. India argued that its patent law was consistent with the TRIPS Agreement because it allowed for the filing of patent applications for pharmaceutical and agricultural chemical products and because it provided for a mechanism for the grant of marketing approval. India also argued that the TRIPS Agreement did not require WTO members to provide for exclusive marketing rights for pharmaceutical and agricultural chemical products. Panel The WTO Dispute Settlement Body (DSB) ruled in favor of the EC in 1998. The DSB found that India's patent law was inconsistent with Articles 70.8 and 70.9 of the TRIPS Agreement and that India was required to amend its law to comply with these provisions. Conclusion India subsequently amended its patent law to comply with the DSB ruling. The amended law provides for the filing of patent applications for pharmaceutical and agricultural chemical products from the date of entry into force of the WTO Agreement and for the grant of exclusive marketing rights for these products.
EC-Hormones case Complainant: US Respondent: EC Third Parties: Aus, Can, NZ, Norway Provisions: Art III, XI GATT Art 2 TBT Art 4 Agriculture Art 2,3,5 SPS

Facts In the United States, as in many other countries, hormones were commonly used in livestock farming to promote faster growth and increase meat production efficiency. This practice involved administering certain hormones to cattle to enhance their growth. The EC, which represents a group of European countries, expressed concerns about the safety of hormone- treated meat products. As a result, the EC imposed a ban on the importation of meat and meat products from cattle treated with certain growth-promoting hormones Arguments United States' Arguments:

Violation of GATT Provisions (Article III and XI): The United States argued that the EC's ban on hormone-treated meat violated the General Agreement on Tariffs and Trade (GATT). Specifically, they pointed to two GATT provisions:  Article III (National Treatment): The U.S. claimed that the EC's measures were discriminatory because they treated imported hormone-treated meat less favorably than domestic hormone-free meat, thus violating the principle of national treatment.  Article XI (General Elimination of Quantitative Restrictions): The U.S. argued that the EC's import ban amounted to a quantitative restriction on trade, which was inconsistent with GATT obligations.
Violation of SPS Agreement (Articles 2, 3, and 5): The United States asserted that the EC's measures violated the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). Relevant provisions include:  Article 2 (Basic Rights and Obligations): The U.S. argued that the EC did not base its measures on a scientific risk assessment as required by the SPS Agreement.  Article 3 (Harmonization): The U.S. contended that the EC's measures were not based on international standards, which was inconsistent with the principle of harmonization.  Article 5 (Risk Assessment): The U.S. claimed that the EC failed to provide a sufficient scientific justification for its ban on hormone-treated meat. European Communities' Arguments:
Precautionary Principle: The EC argued that its measures were justified under the precautionary principle, which is not explicitly mentioned in the WTO agreements but is recognized as a legitimate basis for taking protective measures. The precautionary principle allows countries to act in the absence of conclusive scientific evidence when faced with potential risks to human health or the environment.
Consumer Health and Safety: The EC contended that its restrictions were put in place in response to genuine concerns among European consumers about the safety of hormone-treated meat. They argued that protecting the health and safety of their citizens was a paramount concern.
Consistency with SPS Agreement (Articles 2, 3, and 5): While the U.S. claimed violations of the SPS Agreement, the EC argued that its measures were consistent with this agreement:  Article 2 (Basic Rights and Obligations): The EC maintained that it had conducted risk assessments and took measures to address identified risks.

Joining of Consultations: Australia, Canada, and New Zealand requested to join the consultations between the European Communities and the United States. These countries had a significant interest in the outcome of the dispute, as they were major exporters of beef products to the European market and were affected by the EC's measures.
Compliance Assessment: During the compliance proceedings, the parties discussed whether the changes made by the European Communities were sufficient to bring their measures into compliance with the WTO rulings. This involved an assessment of whether the EC's revised measures addressed the concerns raised in the original dispute. Conclusion As a result of the dispute, the United States and the European Communities reached an understanding to address some of the trade issues related to hormone-treated meat. This understanding was outlined in a Memorandum of Understanding (MoU).
Japan-Alcoholic beverages II 1996 Complainant: EC Respondent: Japan Provisions: Art III:2 GATT 1994 Facts  Complainants: The European Communities, Canada, and the United States.  Consultations Requested: The EC initiated consultations on June 21, 1995, followed by Canada and the United States on July 7, 1995. The complainants alleged that Japan's liquor tax system discriminated against imported spirits, particularly whisky, cognac, and white spirits, in favor of domestically produced "shochu. Panel  Panel Establishment: A joint panel was established on September 27, 1995, to examine the dispute.  Panel Composition: The panel was composed on October 30, 1995.  Panel Report: The panel's report, issued on July 11, 1996, found that Japan's liquor tax system was inconsistent with Article III:2 of the General Agreement on Tariffs and Trade (GATT). The panel concluded that the tax system discriminated against imported Appellate Body  Appeal Filed: On August 8, 1996, Japan filed an appeal challenging the panel's findings.  Appellate Body Report: The Appellate Body's report was circulated to WTO members on October 4, 1996. The Appellate Body upheld the panel's conclusion that Japan's Liquor Tax Law was inconsistent with GATT Article III:2. However, it also noted errors in the panel's legal reasoning.  Adoption of Reports: The reports of the panel and the Appellate Body, as modified by the latter, were adopted on November 1, 1996. Conclusion Implementation of Adopted Reports:  Binding Arbitration: On December 24, 1996, the United States, in accordance with Article 21(3)(c) of the Dispute Settlement Understanding (DSU), applied for binding arbitration to determine the reasonable period of time for Japan to implement the recommendations of the Appellate Body.

 Arbitrator's Report: The Arbitrator's report, which specified a reasonable implementation period, was circulated to WTO members on February 14, 1997. The report determined that Japan had 15 months from the date of adoption of the reports (until February 1, 1998) to implement the recommendations.  Modalities for Implementation: Japan presented modalities for implementing the recommendations, and these modalities were accepted by the complainants. This step marked progress toward resolving the dispute by addressing the discriminatory aspects of Japan's liquor tax system.

China- rare earths 2014 Complainant: EC Respondent: China Provisions Art XI:1 This article prohibits quantitative restrictions on imports. A quantitative restriction is a measure that restricts the quantity of a product that can be imported. For example, a quota is a quantitative restriction that limits the number of units of a product that can be imported Art X:3(a) This article requires WTO members to publish all trade-related measures, including quantitative restrictions. This is so that other WTO members can be aware of these measures and can assess their impact on trade. Protocol of Accession of china: The Protocol of Accession of China GATT is an important document because it sets out the terms and conditions under which China joined the GATT. The protocol also includes a number of commitments by China to liberalize its trade regime. Arguments European Union  The EU argued that China's export quotas on rare earths, tungsten, and molybdenum were inconsistent with Article XI:1 of the GATT, which prohibits quantitative restrictions on imports.  The EU also argued that the export quotas were inconsistent with Article 3.1 of the SCM Agreement, which prohibits export subsidies.  The EU argued that the export quotas were not necessary to conserve China's rare earth resources or to protect the environment.  The EU argued that the export quotas were a form of protectionism designed to protect Chinese producers from foreign competition. China  China argued that the export quotas were necessary to conserve its rare earth resources and to protect the environment.  China argued that the export quotas were not a form of export subsidy because they did not involve a financial transfer from the Chinese government.  China argued that the export quotas were not inconsistent with the GATT or the SCM Agreement because they were justified by China's legitimate objectives of conservation and environmental protection.

The United States appealed the DSB ruling, but the Appellate Body upheld the ruling in 2014. The United States subsequently lifted the ban on clove cigarettes.

Spain Unroasted Coffee case Complainant: Brazil Respondent: EC Provisions Art 1 The Spain Unroasted Coffee case was a dispute between Brazil and Spain at the World Trade Organization (WTO). Brazil alleged that Spain's tariff régime for unroasted coffee was inconsistent with Article I:1 of the General Agreement on Tariffs and Trade (GATT). Article I:1 of the GATT prohibits discrimination between imported and domestic products. This means that WTO members cannot impose different tariffs on imported products than they do on domestically produced products. In 1979, Spain adopted a new tariff régime for unroasted coffee. Under this régime, unroasted coffee imported under the State-trading system was subject to a lower tariff than unroasted coffee imported by private entities. Brazil argued that Spain's tariff régime for unroasted coffee was inconsistent with Article I:1 of the GATT because it discriminated against Brazilian coffee. Brazil argued that the lower tariff for coffee imported under the State-trading system was a form of government subsidy that gave Spanish coffee producers an unfair advantage. Spain argued that its tariff régime for unroasted coffee was justified by the need to protect its domestic coffee industry. Spain argued that the lower tariff for coffee imported under the State-trading system was necessary to ensure the supply of coffee to the Spanish market. The WTO Dispute Settlement Body (DSB) ruled in favor of Brazil in 1981. The DSB found that Spain's tariff régime for unroasted coffee was inconsistent with Article I:1 of the GATT. The DSB also found that the lower tariff for coffee imported under the State-trading system was not justified by the need to protect Spain's domestic coffee industry. Spain appealed the DSB ruling, but the Appellate Body upheld the ruling in 1982. Spain subsequently amended its tariff régime for unroasted coffee to comply with the DSB ruling. The Spain Unroasted Coffee case is an important case in the history of the WTO. The case helped to clarify the obligations of WTO members under the GATT with respect to the principle of non-discrimination. The case also showed the importance of the WTO dispute settlement system in resolving disputes between WTO members.
Thailand H-Beams case Complainant: Brazil Respondent: EC Third Parties: EC, Japan, US Provisions Art 2,3,5,6 Anti-dumping agreement Art VI The Thailand H-Beams case was a dispute between Brazil and Thailand at the World Trade Organization (WTO). Brazil alleged that Thailand's anti-dumping measures on imports of H-beams from Brazil were inconsistent with the Agreement on Anti-Dumping (AD Agreement) and Article VI of the General Agreement on Tariffs and Trade (GATT). H-beams are a type of steel beam that is used in construction. Brazil is a major exporter of H-beams. In 2002, Thailand imposed anti-dumping duties on imports of H-beams from Brazil. The Thai authorities found that Brazilian H-beams were being dumped in the Thai market, meaning that they were being sold at a price below their fair value.

Brazil argued that Thailand's anti-dumping measures were inconsistent with the AD Agreement and Article VI of the GATT. Brazil argued that the measures were not based on a fair comparison between the prices of Brazilian H-beams and the prices of comparable H-beams produced in Thailand. Brazil also argued that the measures were not necessary to prevent or remedy dumping. The WTO Dispute Settlement Body (DSB) ruled in favor of Brazil in 2007. The DSB found that Thailand's anti-dumping measures were inconsistent with the AD Agreement and Article VI of the GATT. The DSB also found that the measures were not necessary to prevent or remedy dumping. Thailand appealed the DSB ruling, but the Appellate Body upheld the ruling in 2008. Thailand subsequently withdrew its anti-dumping measures on imports of H-beams from Brazil UNIT I International trade and the Law of WTO The World Trade Organization (WTO) is the international organization that sets the rules of trade between nations. It is the successor to the General Agreement on Tariffs and Trade (GATT), which was established in 1947. The WTO has 164 member countries, which together account for over 98% of world trade. The WTO's law is based on the principles of non-discrimination, reciprocity, enforceable commitments, transparency, and safety valves. The most important principle is non-discrimination, which is embodied in the most-favored-nation (MFN) rule and the national treatment principle. The MFN rule requires WTO members to treat all other members equally, regardless of their trading relationship. The national treatment principle requires WTO members to treat imported goods and services no less favorably than domestically produced goods and services. The WTO also allows for certain exceptions to the non-discrimination principles, such as tariffs, quotas, and subsidies. These exceptions are allowed only if they are necessary to protect a country's national security, public morals, or human, animal, or plant health. The WTO's law is enforced through a dispute settlement system. If a WTO member believes that another member is violating the rules, it can file a complaint with the WTO. The dispute settlement system is designed to be impartial and efficient, and its decisions are binding on the parties involved. The WTO's law has had a significant impact on international trade. It has helped to reduce tariffs and other trade barriers, and it has promoted fair and transparent trade practices. The WTO has also helped to resolve trade disputes between countries. Here are some of the specific ways in which the WTO's law has affected international trade:  Reduced tariffs: The WTO has helped to reduce tariffs on goods and services. This has made it cheaper for businesses to import and export goods and services, which has increased trade and economic growth.  Promoted fair competition: The WTO's rules on non-discrimination and subsidies have helped to promote fair competition in the global marketplace. This has made it more difficult for countries to give unfair advantages to their own businesses.  Resolved trade disputes: The WTO's dispute settlement system has helped to resolve trade disputes between countries. This has helped to ensure that the rules of the WTO are followed and that trade flows smoothly. GATT

UNIT II

Origin, membership, structure, decision making of WTO Principles of WTO UNIT III Challenges and reforms in developing countries MFN treatment Dumping Dumping is a trade practice where a company sells a product in a foreign market at a price that is lower than the price it charges in its home market. Dumping can be harmful to domestic industries in the importing country, as it can lead to job losses and lower prices for consumers. The World Trade Organization (WTO) defines dumping as "the introduction of a product into the commerce of another country at less than its normal value." The WTO Agreement on Anti-Dumping allows WTO members to take measures to counter dumping, such as imposing anti-dumping duties. There are a number of reasons why companies might engage in dumping. One reason is to drive out competition in the foreign market. By selling products at a lower price, the dumping company can force its competitors to lower their prices or go out of business. This can give the dumping company a monopoly in the foreign market. Another reason for dumping is to increase market share. By selling products at a lower price, the dumping company can attract new customers and increase its market share in the foreign market. This can help the dumping company to achieve economies of scale and lower its production costs. Dumping can also be used as a strategic tool to retaliate against unfair trade practices by other countries. For example, a country might dump products in another country if that country is imposing tariffs or quotas on its exports. The WTO Agreement on Anti-Dumping sets out a number of rules governing the use of anti-dumping measures. These rules are designed to ensure that anti-dumping measures are used fairly and do not harm legitimate trade. To determine whether dumping is occurring, the WTO Agreement on Anti-Dumping requires WTO members to compare the price of the product in the foreign market to the price of the product in the home market. The price in the home market is considered to be the normal value. If the price in the foreign market is less than the normal value, then dumping is presumed to be occurring. The WTO Agreement on Anti-Dumping also requires WTO members to determine whether the dumping is causing or threatening to cause material injury to a domestic industry in the importing country. If the dumping is causing or threatening to cause material injury, then the WTO member can impose anti-dumping duties. Anti-dumping duties are designed to offset the effects of dumping. They are calculated as the difference between the normal value and the export price. Anti-dumping duties can be imposed for a period of up to five years. The WTO Agreement on Anti-Dumping is a complex and controversial agreement. There is debate about how the agreement should be interpreted and applied. Some countries argue that the agreement is too restrictive and makes it difficult to take action against dumping. Other countries argue that the agreement is not strict enough and does not do enough to protect domestic industries from dumping.

The WTO Agreement on Anti-Dumping is a work in progress. The agreement is constantly being interpreted and applied by WTO members. The agreement is also being reviewed and updated on a regular basis

WTO Disputes: India-Patent & Spain Coffee Cases - GATT & SPS Agreement Implications, Study notes of International Trade Union Law

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UNIT II