Topics handled by WTO committees and agreements
Issues covered by the WTO’s committees and agreements


Licensing Agreement


> EC — Bananas III, para. 193
> EC — Bananas III, para. 197
> EC — Poultry, para. 121
> EC — Bananas III, paras. 203–204

L.2.1 EC — Bananas III, para. 193     back to top

… Although the precise terms of Article 1.1 do not say explicitly that licensing procedures for tariff quotas are within the scope of the Licensing Agreement, a careful reading of that provision leads inescapably to that conclusion. …

L.2.2 EC — Bananas III, para. 197     back to top

… By its very terms, Article 1.3 of the Licensing Agreement clearly applies to the application and administration of import licensing procedures, and requires that this application and administration be “neutral … fair and equitable”. Article 1.3 of the Licensing Agreement does not require the import licensing rules, as such, to be neutral, fair and equitable. … none of the provisions of the Licensing Agreement concerns import licensing rules, per se. As is made clear by the title of the Licensing Agreement, it concerns import licensing procedures. The preamble of the Licensing Agreement indicates clearly that this agreement relates to import licensing procedures and their administration, not to import licensing rules. Article 1.1 of the Licensing Agreement defines its scope as the administrative procedures used for the operation of import licensing regimes.

L.2.3 EC — Poultry, para. 121     back to top

… The requirement to prevent trade distortion found in Articles 1.2 and 3.2 of the Licensing Agreement refers to any trade distortion that may be caused by the introduction or operation of licensing procedures, and is not necessarily limited to that part of trade to which the licensing procedures themselves apply. There may be situations where the operation of licensing procedures, in fact, have restrictive or distortive effects on that part of trade that is not strictly subject to those procedures.

L.2.4 EC — Bananas III, paras. 203–204     back to top

… We attach no significance to the difference in the phrases “neutral in application and administered in a fair and equitable manner” in Article 1.3 of the Licensing Agreement and “administer in a uniform, impartial and reasonable manner” in Article X:3(a) of the GATT 1994. In our view, the two phrases are, for all practical purposes, interchangeable. We agree, therefore, with the Panel’s interpretation that the provisions of Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing Agreement have identical coverage.

Although Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing Agreement both apply, the Panel, in our view, should have applied the Licensing Agreement first, since this agreement deals specifically, and in detail, with the administration of import licensing procedures. If the Panel had done so, then there would have been no need for it to address the alleged inconsistency with Article X:3(a) of the GATT 1994.

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