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> Article I of the GATT 1994
> Article II of the GATS
> Article 4 of the TRIPS Agreement
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M.2.1 Article I of the GATT 1994
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M.2.1.1 EC — Bananas III,
para. 206
(WT/DS27/AB/R)
… we agree with the Panel that the activity function rules are an
“advantage” granted to bananas imported from traditional ACP States,
and not to bananas imported from other Members, within the meaning of
Article I:1. Therefore, we uphold the Panel’s finding that the
activity function rules are inconsistent with Article I:1 of the GATT
1994.
M.2.1.2 Canada — Autos, para. 78
(WT/DS139/AB/R, WT/DS142/AB/R)
… we observe first that the words of Article I:1 do not restrict
its scope only to cases in which the failure to accord an “advantage”
to like products of all other Members appears on the face of the
measure, or can be demonstrated on the basis of the words of the
measure. Neither the words “de jure” nor “de facto”
appear in Article I:1. Nevertheless, we observe that Article I:1 does
not cover only “in law”, or de jure, discrimination. As
several GATT panel reports confirmed, Article I:1 covers also “in fact”,
or de facto, discrimination. Like the Panel, we cannot accept
Canada’s argument that Article I:1 does not apply to measures which,
on their face, are “origin-neutral”. …
M.2.1.3 Canada — Autos, paras. 79, 81
(WT/DS139/AB/R, WT/DS142/AB/R)
We note next that Article I:1 requires that “any advantage,
favour, privilege or immunity granted by any Member to any product
originating in or destined for any other country shall be accorded
immediately and unconditionally to the like product originating in or
destined for the territories of all other Members.” (emphasis
added) The words of Article I:1 refer not to some advantages
granted “with respect to” the subjects that fall within the defined
scope of the Article , but to “any advantage”; not to some
products, but to “any product”; and not to like products from
some other Members, but to like products originating in or
destined for “all other” Members.
…
Thus, from both the text of the measure and the Panel’s conclusions
about the practical operation of the measure, it is apparent to us that
“[w]ith respect to customs duties … imposed on or in connection with
importation …,” Canada has granted an “advantage” to some
products from some Members that Canada has not “accorded immediately
and unconditionally” to “like” products “originating in or
destined for the territories of all other Members.” (emphasis
added) And this, we conclude, is not consistent with Canada’s
obligations under Article I:1 of the GATT 1994.
M.2.1.4 Canada — Autos, para. 84
(WT/DS139/AB/R, WT/DS142/AB/R)
The object and purpose of Article I:1 supports our interpretation.
That object and purpose is to prohibit discrimination among like
products originating in or destined for different countries. The
prohibition of discrimination in Article I:1 also serves as an incentive
for concessions, negotiated reciprocally, to be extended to all other
Members on an MFN basis.
M.2.1.5 EC — Tariff Preferences,
para. 101
(WT/DS246/AB/R)
It is well settled that the MFN principle embodied in Article I:1 is
a “cornerstone of the GATT” and “one of the pillars of the WTO
trading system”, which has consistently served as a key basis and
impetus for concessions in trade negotiations. …
M.2.2 Article II of the GATS
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M.2.2.1 EC — Bananas III, paras. 233-234
(WT/DS27/AB/R)
… The question here is the meaning of “treatment no less
favourable” with respect to the MFN obligation in Article II of the
GATS. There is more than one way of writing a de facto
non-discrimination provision. Article XVII of the GATS is merely one of
many provisions in the WTO Agreement that require the
obligation of providing “treatment no less favourable”. The
possibility that the two Articles may not have exactly the same meaning
does not imply that the intention of the drafters of the GATS was
that a de jure, or formal, standard should apply in Article II of
the GATS. If that were the intention, why does Article II not say as
much? The obligation imposed by Article II is unqualified. The ordinary
meaning of this provision does not exclude de facto
discrimination. Moreover, if Article II was not applicable to de
facto discrimination, it would not be difficult — and, indeed, it
would be a good deal easier in the case of trade in services, than in
the case of trade in goods — to devise discriminatory measures aimed at
circumventing the basic purpose of that Article .
For these reasons, we conclude that “treatment no less favourable”
in Article II:1 of the GATS should be interpreted to include de facto,
as well as de jure, discrimination. …
M.2.2.2 EC — Bananas III, para. 241
(WT/DS27/AB/R)
We see no specific authority either in Article II or in Article XVII
of the GATS for the proposition that the “aims and effects” of a
measure are in any way relevant in determining whether that measure is
inconsistent with those provisions. In the GATT context, the “aims and
effects” theory had its origins in the principle of Article III:1 that
internal taxes or charges or other regulations “should not be applied
to imported or domestic products so as to afford protection to domestic
production”. There is no comparable provision in the GATS. …
M.2.2.3 Canada — Autos, paras. 170-171
(WT/DS139/AB/R, WT/DS142/AB/R)
The wording of this provision suggests that analysis of the
consistency of a measure with Article II:1 should proceed in several
steps. First, as we have seen, a threshold determination must be made
under Article I:1 that the measure is covered by the GATS. This
determination requires that there be “trade in services” in one of
the four modes of supply, and that there be also a measure which “affects”
this trade in services. We have already held that the Panel failed to
undertake this analysis.
If the threshold determination is that the measure is covered
by the GATS, appraisal of the consistency of the measure with the
requirements of Article II:1 is the next step. The text of Article II:1
requires, in essence, that treatment by one Member of “services and
services suppliers” of any other Member be compared with treatment of
“like” services and service suppliers of “any other country”.
Based on these core legal elements, the Panel should first have rendered
its interpretation of Article II:1. It should then have made factual
findings as to treatment of wholesale trade services and service
suppliers of motor vehicles of different Members commercially present in
Canada. Finally, the Panel should have applied its interpretation of
Article II:1 to the facts as it found them.
M.2.2.4 Canada — Autos, para. 181
(WT/DS139/AB/R, WT/DS142/AB/R)
Clearly, here the Panel is confusing the application of the
import duty exemption to manufacturers with its possible effect
on wholesalers. In our view, the Panel has conducted a “goods”
analysis of this measure, and has simply extrapolated its analysis of
how the import duty exemption affects manufacturers to wholesale trade
service suppliers of motor vehicles. The Panel surmised, without
analyzing the effect of the measure on wholesalers as service suppliers,
that the import duty exemption, granted to a limited number of
manufacturers, ipso facto affects conditions of competition among
wholesalers in their capacity as service suppliers. As we stated
earlier in respect of whether the measure at issue “affects trade in
services”, the Panel failed to demonstrate how the import duty
exemption granted to certain manufacturers, but not to other manufacturers,
affects the supply of wholesale trade services and the
suppliers of wholesale trade services of motor vehicles. In reaching
its conclusions under Article II:1 of the GATS, the Panel has neither
assessed the relevant facts — we see no analysis of any evidence
relating to the supply of wholesale trade services of
motor vehicles — nor has it interpreted Article II of the GATS and
applied that interpretation to the facts it found.
M.2.3 Article 4 of the TRIPS Agreement
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M.2.3.1 US — Section 211 Appropriations Act,
para. 317
(WT/DS176/AB/R)
The fact that Section 515.201 of Title 31 CFR could also apply
to a non-Cuban foreign national does not mean, however, that it would
offset in each and every case the discriminatory treatment
imposed by Sections 211(a)(2) and (b) on Cuban original owners. … We
are, therefore, not satisfied that Section 515.201 would offset the
inherently less favourable treatment present in Sections 211(a)(2) and
(b) in each and every case.
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