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M.2.1 Article I of the GATT 1994 back to top
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 back to top
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
analysing 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 back to top
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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