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Pages: 9 Questions: 14

UNIVERSITY OF TASMANIA

EXAMINATIONS FOR DEGREES AND DIPLOMAS

JUNE 2014

LAW663 INTERNATIONAL TRADE LAW

Examiner: Ms Anja Hilkemeijer

Time allowed: TWO (2) hours plus fifteen (15) minutes

Instructions: Read the questions carefully and only include material in your answer that directly answers the questions. Section A is worth 10 marks, Section B is worth 30 marks and Section C is worth 60 marks. In Section A you must answer all four questions. In Section B please select one question only from the five options. In Section C please select two questions only from five options.

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LAW663 International Trade Law

SECTION A Worth 10 marks STUDENTS MUST ANSWER ALL FOUR QUESTIONS IN THIS PART

Question 1 a) What is a process and production based trade measure (PPM)? b) Give two examples of such a measure. c) Does the WTO permit such measures? [3 marks]

Question 2 In the WTO, what are the most important differences between safeguard measures on the one hand and antidumping/countervailing measures on the other. [3 marks]

Question 3 Explain the ‘reverse consensus’ rule applicable to the adoption of Appellate Body reports. [2 marks]

Question 4 What is required for a free trade agreement to be consistent with WTO rules? [2 marks]

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LAW663 International Trade Law

SECTION B Worth 30 marks STUDENTS MUST ANSWER ONE ONLY OF THE FOLLOWING FIVE QUESTIONS

Question 5 “NGOs should be given a greater role in decision making, trade rounds, and the dispute resolution system in the WTO in order to increase its legitimacy?” Do you agree?

Question 6 Imagine country A has lost a dispute against another WTO member - country B, including an appeal to the Appellate Body, but country B refuses to implement the Panel's recommendations which have been confirmed by the Appellate Body ruling and the Dispute Settlement Body (DSB). a) What options does country A have in terms of resolving this dispute including remedies against country B? b) Are these remedies likely to be effective?

Question 7 Under what conditions does the WTO TRIPS Agreement permit compulsory licensing to allow the manufacture and export of HIV/Aids related drugs to poor countries unable to manufacture such drugs themselves? Do the WTO mechanisms in this area - including the Doha Declaration on the TRIPS Agreement and Public Health, Waiver Decision and Amendment - demonstrate that the WTO TRIPS agreement is sufficiently flexible to address this major public health issue?

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LAW663 International Trade Law

Question 8 a)

Explain the differences and similarities between the TBT and SPS Agreements in terms of their scope. b) The TBT Agreement and the SPS Agreement take different approaches to the use of international standards. What are those different approaches, what is their policy rationale, and which of these standards is more onerous? (Adapted from Guzman and Pauwelyn, p.588)

Question 9 The 2nd preambular paragraph of the WTO Agreement refers to the “need for positive efforts designed to ensure that developing countries…. secure a share in the growth in international trade commensurate with the needs of their economic development.” What ‘positive efforts’ to help developing countries “secure a share in the growth in international trade” are reflected in the WTO Agreements? Do these efforts ensure that developing countries receive the assistance they need?

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LAW663 International Trade Law

SECTION C Worth 60 marks STUDENTS MUST ANSWER TWO ONLY OF THE FOLLOWING FIVE QUESTIONS (EACH OF WHICH IS WORTH 30 MARKS)

Question 10 Countries A and B are both WTO members. Country A has a strong organic free range egg industry but allows the production and sale of caged and non-organic chicken eggs. The egg industry in country A has publicly stated that it wishes to exclude competition in order to preserve jobs and has lobbied successfully the government of country A to place a prohibition on the import of eggs from caged and non-organic chicken from other countries. Country A has justified this ban - which goes beyond any international standard - by relying upon the expert opinion of Professor Eaglebottom who has proclaimed that eggs from caged and non-organic chicken have a one in 100,000 chance of producing cancer. Professor Eaglebottom’s views have appeared in one peer reviewed journal but the vast majority of scientists in this field maintain that there is no health risk whatsoever from eating eggs from caged non-organic chicken. Country B wishes to export non-free range and non-organic eggs into country A’s egg market.

Can country B successfully challenge country A’s import ban under the WTO rules?

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LAW663 International Trade Law

Question 11 Country A bans the import of lobster from countries on a so-called ‘X list’. The X list comprises countries which country A considers not to meet its ‘sustainable’ lobster management’ criteria (SLMC). Country A prohibits the sale of lobster internally within Country A from lobster farms not managed in accordance with the SLMC. Assume there is no international treaty regulating lobsters and that Country A has advocated such a treaty but to no avail. Also assume that the SLMC are far more stringent than any existing international standards and that they have been strongly supported by both environmental non-government organizations but also by country A’s lobster industry as a way of excluding competition. Country B is a developing country on the X list wishing to export its lobster into country A. Country B argues that country A’s sustainable lobster criteria are an excuse for trade protectionism and has sought negotiations with country A on the issue without success. Can country B challenge country A’s trade measures under the WTO rules?

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LAW663 International Trade Law

Question 12

1. Last year, Newland adopted legislation, commonly referred to as the Tetra Pack Act, which requires that all non-alcoholic beverages be sold in Tetra Pack containers. . According to Newland, the recycling of Tetra Pack containers is more eco-friendly than the recycling of glass bottles. Moreover, the use of Tetra Pack containers, rather than glass bottles, will reduce the use of silica, which is, according to Newland, a mineral in ever-shorter supply. Newland also argue that the mandatory use of Tetra Pack containers for non-alcoholic beverages will help consumers to differentiate between alcoholic beverages and non-alcoholic beverages and help to avoid consumer fraud. Newland backs up these views with scientific studies, but the conclusion of few of these studies reflect the majority view in the scientific community. Richland was the main exported of non-alcoholic beverages in glass bottles to Newland. It was, therefore, much affected by Newland’s Tetra Pack Act. Richland is of the opinion that Newland introduced this legislation primarily to support its emerging packaging industry. In Richland’s opinion, there is no serious scientific basis for Newland’s requirement to use Tetra Pack containers, and the level of environmental protection set by Newland is excessively high. Richland also points out that alcoholic beverages, and in particular wine, of which Newland is an important producer and exporter, can be sold in glass bottles as well as Tetra Pack containers. Advise Newland on possible justifications for its Tetra Pack Act under Article XX of the GATT 1994. (Adapted from Van den Bossche, p. 604)

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LAW663 International Trade Law

Question 13 Flandria is a rich, developed country and a member of the WTO. Its population is sensitive to the protection of endangered species and questions of animal welfare. Shocked by the killing of seals, most of which are less than 3 months old, in places like Hiverna and Deprivia, Flandria imposed a ban on the production, marketing, sale and importation of all products derived from seals including seal skins. Flandria cites evidence that the seals are killed in brutal ways and, most of the time, skinned alive. Only seal products derived from seals hunted by the Inuit people using traditional methods in Hiverna are permitted for importation into Flandria, Flandria itself does not have a seal population, nor would its climate permit one. Deprivia is a developing country, a member of the WTO, and a major producer and exporter of seal products. Deprivia has a large commercial sealing industry and its small Inuit sealing community markets its products through commercial sealing channels. It is impossible to tell the difference between seal products harvested by commercial or by indigenous methods. Deprivia challenges Flandria’s ban on seal products as a violation of GATT Articles III and XI and argues that the manner in which Deprivia treats, kills or skins its seals is none of Flandria’s business. How should a WTO panel approach Flandria’s seal product ban? (Adapted from Guzman and Pauwelyn, International Trade Law, p 302).

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LAW663 International Trade Law

Question 14 Moralia is a developed WTO member with world-class soccer teams, avid soccer fans and a strict moral code of behavior. In bilateral tariff negotiations with Indiraland, Moralia managed to extract valuable market access for Moralian exports. In exchange, Moralia offered duty-free access to hand-stitched leather soccer balls, of which Indiraland is a major producer. However, to ensure that this concession is particularly meaningful to Indiraland, and less so to its archrival Palubistan (which has not been forthcoming at all in its tariff negotiations with Moralia), Moralia limited its duty-free treatment to hand-stitched leather soccer balls made without child labor. Unlike Palubistan, Indiraland has successfully ended its child labor practices in the industry. The Moralian government also wanted to send a message to the rest of the world that Moralian consumers do not tolerate child labor. Palubistan’s soccer balls that cannot be certified as having been made without child labor remain subject to a 50% tariff duty. Palubistan, which is still struggling to put an end to child labor in its leather industry, challenges Moralia’s tariff distinction. 1. How would a WTO panel approach Moralia’s tariff schedule on soccer balls? 2. Would your answer be different if Inidiraland was not a WTO member; or Palubistan was not a WTO member? 3. What if Moralia did not use its tariff policy to affect soccer balls made with child labor, but simply banned the production, sale and importation of all soccer balls made with child labor as an internal regulation? (Adapted from Guzman and Pauwelyn, International Trade Law, pp. 329-330).

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