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INT’L TRADE LAW BASIC GATT PILLARS III. Prof David K. Linnan USC LAW # 665 Unit Five. GATT PILLARS. RECALL THE FOUR PILLARS Idea of four pillars within GATT/WTO system: 1. Most Favored Nations [two weeks ago] 2. National Treatment [last week]
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INT’L TRADE LAW BASIC GATT PILLARS III Prof David K. Linnan USC LAW # 665 Unit Five
GATT PILLARS RECALL THE FOUR PILLARS Idea of four pillars within GATT/WTO system: 1. Most Favored Nations [two weeks ago] 2. National Treatment [last week] 3. Trade Liberalization (negotiated tariff reductions in trade rounds) [this week, customs law] 4. Non-Tariff Barriers & “Fair Trade” [next week] CONSIDER WTO VIDEO AS PRINCIPLES ACROSS DIFFERENT AGREEMENTS, IDEA ALMOST OF CONSTITUTIONAL PRINCIPLES
GATT AS CONST LOOK AT ARTICLES II & VII, RE SCHEDULE OF CONCESSIONS & CUSTOMS VALUATION GATT 1947 AGREEMENT Look at Art II generally on tariff negotiations, but also recognition of things like problems with domestic law (court decisions, Art II(5)); Art VII customs valuation
CURRENT TREAT LOOK AT SUBSIDIARY WTO AGREEMENTS & CODES SINCE TOKYO ROUND Agreement on Implementing Art VII (Customs Valuation Agreement) Agreement on Preshipment Inspection (but post-9/11 more issues) Agreement on Rules of Origin Harmonized Tariff Arrangements PLUS CONCEPT OF IMPLEMENTATION IN DOMESTIC LAW (CUSTOMS & IMPORT EXPORT UNDER COMMERCE DEPARTMENT)
RULES OF ORIGIN TWO DIFFERENT KINDS OF ROES 1. Non-preferential identification of goods as “foreign” (assumption basis in true info to customers; is this consistent with open commerce & free markets) 2. Preferential ROEs as with NAFTA, benefit of FTA UNDERLYING ISSUES OF COMPOSITE GOODS SAME FOR BOTH, DIFFERENT OUTCOMES (POTENTIALLY FORFEIT VS. HIGHER TARIFFS)
ROEs II RE NON-PREFERENTIAL, SATISFACTORY ID What is a “conspicuous” marking? Pabrini v US [Taiwanese umbrella labels] IS CARAN D’ACHE PEN MARKING CONSPICUOUS? WHAT OF BEN & JERRY-LIKE MODEL?
ROEs III SUBSTANTIAL TRANSFORMATION RULE ON MIXED & REWORKED GOODS 1. Can work both on tariff rates (via classification) & country determinations 2. Uniroyal v US [Topsiders manufactured in part inside & outside US, rule is?] WHAT IS RESOLUTION OF CARAN D’ACHE ASSEMBLY? PAINTING? SCREW TOGETHER? WHAT?
CUSTOMS ENTRY CONCEPT OF ENTRY & IMPLICITLY CUSTOMS TERRITORY 1. Language of customs a geographic one (“behind customs barrier”), but a legal concept instead with exceptions a. FTZs (beloved of state development officials & local infrastructure people) i. Privileged ii. Non-privileged b. Bonded warehouses HOW DOES BMW DEAL WITH IMPORTED PARTS & ASSEMBLY? STRAIGHT OFF AT PORT OR ENTRY OR VIA FTZ & WHY?
CLASSIFICATION HARMONIZED SYSTEM 1. Interpretation rules a. Classification & valuation w/ importer initially b. Interpretation i. Entireties ii. Equal specificity (competing descrip) iii. Essential character iv. Heading last in numerical order v. Closest heading for analogous goods
CLASSIFICATION CLASSIFICATION PROBLEMS Simod America v US [Italian shoes] Marubeni v US [Nissan Pathfinder]
VALUATION METHODOLOGIES GATT VS US LAW? Transaction value and form of business (middleman problem) Nissho Iwai American v US [rail cars] WHAT IS TREATMENT ON WALMART BUYING FROM CHINA?