Trade

U.S.--Sections 301-310 of the Trade Act of 1974

* EU argues that USTR can determine whether US rights have been denied even absent a DSB report. $ lost from such a violation cannot be compensated; Panel agrees, but recognizes that such a finding is not mandatory.

* Panel: Under Art. XXIII, the WTO has exclusive authority to determine if an inconsistency has occurred, the reasonable time period in which a nation can implement DSB recommendations and the level of suspension of concessions that can be imposed as a result of a violation.

* Legislation may be found to be violative, even if never applied; Thus, an Art. XXIII violation can occur by an ad hoc action or a general measure

* Issue, then, is whether only mandatory or also discretionary national laws are prohibited...Does § 304 violate DSU Art. XXIII?

* Because §304 allows the U.S. to exercise its discretion whether to violate Art. XXIII, Panel finds it presumptively violative.

* Panel finds it a "bad faith" action to maintain a system that provides for the possibility of circumventing the U.S.'s WTO obligations, even if U.S. promises not to do so (counterargument: any country can, if it chooses, create and implement policies that violate WTO obligations; § 301 just streamlines process)

* Though §301 is presumptively, a violation, an SAA submitted to Congress promises to base any determination of violation on DSB findings. Since the USTR could not find discrimination absent a DSB finding the same thing, §301 was all good.

TARIFF BINDINGS

Preferred trade barrier; most common; Major goal of GATT/WTO to turn trade barriers into tariffs

Three Types of Tariffs:

1) Ad Valorem: "Value added"; % of value of goods

ii) Specific: Flat charge per unit/quantity of goods

iii) Mixed: % plus charge per unit/quantity

iv) Tariff Quotas: % levied depending on quantity of goods already allowed into country (e.g. X% up to Y quantity and Z% thereafter)

Benefits of Tariffs:

* Tariffs more transparent; easy to see; quotas less so, more susceptible to corruption

* Difficult to determine who gets/fills quotas

* Effects of tariffs are clear in $ terms; allows super-efficient firms to make up for them

* Provide $ to government, as opposed to firms like quotas do

Tariffs After GATT/WTO

 Tariffs