- Published: September 7, 2022
- Updated: September 7, 2022
- Language: English
- Downloads: 12
The General Agreement on Tariffs and Trade (GATT) 1947 functioned as a means of adjusting trade relationships between countries trying to improve their economies. Contracting parties to this agreement have been bound by it to treat other contracting parties on an equal and reciprocal basis as well as to curb protectionism.
At the start of 1995, the GATT has been succeeded by the World Trade Organization (WTO) and has since been the most important development in international trade. However, it is still essential to note that the GATT as amended is still the central piece of the WTO law . A Dispute Settlement Body (DSB) has been set up under Article IV of WTO Agreement and the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). This body is responsible for disputes arising from the WTO Agreement, GATT 1994, GATS, TRIPs, DSU and Plurilateral Trade Agreements.
The mechanisms for settling disputes that arise are done through consultation, mediation or conciliation, arbitration and panel proceedings. Consultation is compulsory is the first stage of the dispute settlement mechanism. If consultation fails, a panel can then be appointed for the second stage which is the panel proceedings . The case in question here involves a dispute between two WTO members which are Australia and Rwanda. Rwanda states that the actions taken by Australia through the Gorilla and Forest Preservation Act 2005 (Cth) to prevent the entry of coffee and timber exported by Rwanda contravenes the General Agreement on Tariffs and Trade (GATT).
The issue that arises here is on whether the Gorilla and Forest Preservation Act 2005 (Cth) passed by the Australian Government is actually in breach of the GATT. Both countries can attempt to solve this dispute through consultation by information the DSB for their progress to be monitored. If the consultation fails, the complaining party, in this case Rwanda can then ask for a panel to be appointed. Australia can block the creation of a panel once but when the DSB meets for a second time, it can no longer be blocked unless there is a consensus against appointing the panel . Based on the scenario, Rwanda would have a number of options available to them to make claims against Australia’s acts. The first claim would come under Article I (1) GATT 1994 which concerns the “ Most Favoured Nation’ obligation.
It states that equal treatment must be implied to all foreign ountries within the host country’s territory . Goods from all WTO member countries must be allowed to enter a destination market under the same conditions, subject exceptions in Article I (2), (3), (4), III, and XXIV GATT 1994 . In addition, Article I (1) GATT 1994 states that any advantage, favour, privilege or immunity granted by any contracting party 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 contracting parties . The ‘ like product’ stated is defined as identical products and closely related or similar products . The case relating here is the Automobile Panel Report case .
In relations to the case, the term ‘ like products’ would mainly concern the coffee grown by Rwanda and the timber exported by them. Since coffee grown in Rwanda is considered to be similar or closely related to those grown in other countries it would be considered as like products. This goes the same for the timber exported by Rwanda as timber would be an identical or similar product to those exported by other countries to Australia thus classifying it as a like product. Because of the fact that both export goods of Rwanda are considered to be like products when compared to those originating from other contracting parties with Australia, Australia would be in breach of Article I (1) GATT 1994 if they were to forbid the import of Rwanda’s coffee and timber. The next claim that Rwanda may possibly make can be based on Article III GATT 1994 which is the ‘ National Treatment’ obligation.
This is where one country undertakes to treat the nationals & products of another country in the same way it treats its own nationals/products . This principle is set out in Article III (1) GATT 1994 where it states that contracting parties recognize that internal taxes and other internal charges and laws, regulations which affects the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production . Case referred to would be the Gasoline case . In this case, Rwanda may claim that the act of Australia forbidding their exports of coffee and timber from entering the Australian market is an act which breaches Article III GATT 1994.
This is because this prohibition does not amount to the treatment of the nationals and products of another country the same way it treats the domestic nationals and products . In addition there is also a breach in Article III (1) GATT 1994 as the Australian government has imposed laws and regulations on the coffee and timber of Rwanda which subsequently affects the offering of sale as well as the distribution or use of those products . Next, Rwanda could claim according to Article XI GATT 1994. It is stated that non-discrimination among contracting parties is required in administering quantitative restrictions.
Prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall not be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party . The case referred to would be Measures Affecting Exports of Unprocessed Herring and Salmon case . With regards to this case, the restriction imposed by Australia on the exports of Rwanda were based on the act passed by the government and it amounts to a restriction other than duties, taxes or other charges thus resulting in a breach by Australia in Article XI GATT 1994. Moving from Rwanda to Australia, there are a number of options available for Australia’s defence against Rwanda’s claims.
The first defence would be in regards to ‘ like product’ in Article I (1) GATT 1994. Australia would claim that coffees grown in different countries would differ in terms of growing methods and conditions. This would result in the coffee being different in taste and quality thus not being similar nor closely related and because of this it would not fall under the category of ‘ like product’. The coffee grown in Rwanda would differ from those grown in other countries. As for timber, Australia would state that timber grown in countries with different climates and different environments would result in a difference in quality and class of the timber. This being the case, Australia would not have breached Article I (1) GATT 1994 and at the same time rebutting Rwanda’s claims of their coffee and timber being similar or closely related to those from countries who are contracting parties to Australia.
The following defence that can be made by Australia would be based on Article XX (b) GATT 1994 where it states that subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, any contracting party may adopt or enforce measures necessary or relating to protect human, animal or plant life or health . The case that can be referred to here would be the Measures concerning meat and meat products case . As Australia were prohibiting Rwanda’s exports of coffee and timber from entering their market as measures necessary to protect the life of gorillas as well as preventing their habitat from being destroyed, their act would prove to be an exception even though it amounts to an unjustifiable discrimination against Rwanda. In addition, the use of Article XX (b) GATT 1994 may also be supported by Article 2 and Article 3 of the Sanitary and Phytosanitary Measures (SPS Agreement).
Based on Article 2 SPS Agreement, Australia would have the right to apply measures for the protection of the gorillas and the forest although limited to the extent necessary for such protection and based on scientific principles . Australia’s effort to protect the gorillas and forest must also comply with on Article 3 SPS Agreement where the measures undertaken by Australia must be based on international scientific standards. The next defence of Australia would be in terms of Article XX (g) GATT 1994 which concerns the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption . The case in view here would be the Shrimp Sea Turtle case . The gorillas, considering that they are at risk of becoming extinct, as well as the forest in the case were regarded as exhaustible natural resources by Australia. Thus the measure taken by them through the Gorilla and Forest Preservation Act 2005 (Cth) was in view of conserving these exhaustible natural resources.
In conclusion, the articles that may be used by Rwanda in making claims against Australia’s Gorillas and Forest Preservation Act 2005 (Cth) are Article I (1) GATT 1994, Article III GATT 1994, Article III (1) GATT 1994, as well as Article XI GATT 1994. On the other hand, Australia’s defence may be based on Article I (1) GATT 1994, as well as Article XX (b) GATT 1994, and Article XX (g) GATT 1994.
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