INT’L TRADE LAW INT’L TRADE LAW BASIC GATT BASIC GATT PILLARS IIIPILLARS III

Prof David K. Linnan

USC LAW # 665

Unit Six

GATT PILLARSRECALL THE FOUR PILLARS

Idea of four pillars within GATT/WTO system:

1. Most Favored Nations [two weeks ago]

2. National Treatment [last week]

3. Trade Liberalization (negotiated tariff reductions in trade rounds) [this week, customs law]

4. Non-Tariff Barriers & “Fair Trade” [week after next]

CONSIDER WTO VIDEO AS PRINCIPLES ACROSS DIFFERENT AGREEMENTS, IDEA ALMOST OF CONSTITUTIONAL PRINCIPLES

GATT AS CONST LOOK AT ARTICLES II & VII, RE

SCHEDULE OF CONCESSIONS & CUSTOMS VALUATION

GATT 1947 AGREEMENT

Look at Art II generally on tariff negotiations, but also recognition of things like problems with domestic law (court decisions, Art II(5)); Art VII customs valuation

CURRENT TREATLOOK AT SUBSIDIARY WTO AGREEMENTS & CODES SINCE

TOKYO ROUND

Agreement on Implementing Art VII (Customs Valuation Agreement)

Agreement on Preshipment Inspection (but post-9/11 more issues)

Agreement on Rules of Origin (ROO)

Harmonized Tariff Arrangements

PLUS CONCEPT OF IMPLEMENTATION IN DOMESTIC LAW (CUSTOMS & IMPORT EXPORT UNDER COMMERCE DEPARTMENT)

RULES OF ORIGINTWO DIFFERENT KINDS OF ROOS

1. Non-preferential identification of goods as “foreign” (assumption basis in true info to customers; is this consistent with open commerce & free markets)

2. Preferential ROOs as with NAFTA, AFTA benefit of FTA (discuss w/ FTAs)

UNDERLYING ISSUES OF COMPOSITE GOODS SAME FOR BOTH, DIFFERENT OUTCOMES (POTENTIALLY FORFEIT VS. HIGHER TARIFFS)

ROOs IIRE NON-PREFERENTIAL,

SATISFACTORY ID

What is a “conspicuous” marking?

Pabrini v US[Taiwanese umbrella labels]

IS CARAN D’ACHE PEN MARKING CONSPICUOUS? WHAT DOES “SWISS MADE” MEAN?

ROOs IIISUBSTANTIAL TRANSFORMATION RULE ON

MIXED & REWORKED GOODS

1. Can work both on tariff rates (via classification) & country determinations

2. Uniroyal v US[Topsiders manufactured in part inside & outside US, elements of rule as “new

name, character or use”?]

WHAT IS RESOLUTION OF CARAN D’ACHE ASSEMBLY? PAINTING? SCREW TOGETHER? WHAT?

CUSTOMS ENTRYCONCEPT OF ENTRY & IMPLICITLY CUSTOMS TERRITORY

1. Language of customs a geographic one (“behind customs barrier”), but a legal concept instead with exceptions

a. FTZs (beloved of state development officials & local infrastructure people)

i. Privilegedii. Non-privileged

b. Bonded warehouses

HOW DOES BMW DEAL WITH IMPORTED PARTS & ASSEMBLY? STRAIGHT OFF AT PORT OR ENTRY OR VIA FTZ & WHY?

CLASSIFICATIONHARMONIZED SYSTEM

1. Interpretation rulesa. Classification & valuation w/

importer initially

b. Interpretationi. Entireties (finished and

disassembled goods)ii. Equal specificity (competing

descrip)iii. Essential character (with mixed

good, materials give item its character)

iv. Heading last in numerical orderv. Closest heading for analogous

goods

CLASSIFICATIONCLASSIFICATION PROBLEMS

Simod America v US

[Italian shoes, argument about unfinished footwear vs component treatment under substantial completeness test, injection soles]

Marubeni v US

[Nissan Pathfinder, car vs truck treatment based on 2 versus 4 door config]

VALUATIONMETHODOLOGIES

GATT VS US LAW?

Transaction value and form of business (middleman problem)

Nissho Iwai American v US[rail cars]

WHAT IS TREATMENT ON WALMART BUYING FROM CHINA?