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EUROPEAN COMMUNITIES - CONDITIONS FOR
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Short Title |
Full Case Title and Citation |
Argentina - Textiles and Apparel | Appellate Body Report, Argentina - Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1 adopted 22 April 1998, DSR 1998:III, 1003 |
Belgium - Family Allowances | Panel Report, Belgian Family Allowances (allocations familiales), adopted 7 November 1952, BIDS 1S/59 |
Brazil - Aircraft | Appellate Body Report, Brazil - Export Financing Programme for Aircraft, WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 |
Canada - Aircraft | Appellate Body Report, Canada - Measures Affecting the Export of Civilian Aircraft, WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, 1377 |
Canada - Autos | Panel Report, Canada - Certain Measures Affecting the Automotive Industry, WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by the Appellate Body Report, WT/DS139/AB/R, WT/DS142/AB/R, DSR 2000:VII, 3043 |
Canada - Autos | Appellate Body Report, Canada - Certain Measures Affecting the Automotive Industry, WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 2000:VI, 2995 |
Canada - Pharmaceutical Patents | Panel Report, Canada - Patent Protection of Pharmaceutical Products, WT/DS114/R, adopted 7 April 2000, DSR 2000:V, 2295 |
EC - Asbestos | Appellate Body Report, European Communities - Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 April 2001 |
EC - Bananas III | Appellate Body Report, European Communities - Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591 |
EC - Hormones | Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135 |
EC - Sardines | Appellate Body Report, European Communities - Trade Description of Sardines, WT/DS231/AB/R, adopted 23 October 2002 |
India - Patents (US) | Appellate Body Report, India - Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9 |
Indonesia - Autos | Panel Report, Indonesia - Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1, 2, 3, and 4, adopted 23 July 1998, DSR 1998:VI, 2201 |
Japan - Alcoholic Beverages II | Appellate Body Report, Japan - Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97 |
Korea - Dairy | Appellate Body Report, Korea - Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3 |
Korea - Various Measures on Beef | Appellate Body Report, Korea - Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001 |
Turkey - Textiles | Appellate Body Report, Turkey - Restrictions on Imports of Textile and Clothing Products, WT/DS34/AB/R, adopted 19 November 1999, DSR 1999:VI, 2345 |
US - Customs User Fee | Panel Report, United States - Customs User Fee, adopted 2 February 1988, BISD 35S/245 |
US - Gasoline | Appellate Body Report, United States - Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3 |
US - FSC | Appellate Body Report, United States - Tax Treatment for "Foreign Sales Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, 1619 |
US - FSC (Article 21.5 - EC) | Appellate Body Report, United States - Tax Treatment for "Foreign Sales Corporations" - Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW, adopted 29 January 2002 |
US - Offset Act (Byrd Amendment) | Appellate Body Report, United States - Continued Dumping and Subsidy Offset Act of 2000, WT/SD217/AB/R, WT/DS234/AB/R, adopted 27 January 2003 |
US - Section 337 | Panel Report, United States Section 337 of the Tariff Act of 1930, adopted 7 November 1989, BISD 36S/345. |
US - Shrimp | Appellate Body Report, United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, 2755 |
US - Wool Shirts and Blouses | Appellate Body Report, United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R and Corr.1, adopted 23 May 1997, DSR 1997:I, 323 |
US - MFN Footwear | Panel Report, United States - Denial of Most-Favoured-Nation Treatment as to Non-Rubber Footwear from Brazil, adopted 19 June 1992, BISD 39S/128 |
LIST OF ANNEXES
Page |
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ANNEX A |
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Annex A | Decision of the Panel on the Request for Enhanced Third Party Rights | A-2 |
ANNEX B |
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Parties |
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Annex B-1 | Replies of India to Questions from the Panel after the First Panel Meeting | B-2 |
Annex B-2 | Replies of the European Communities to Questions from the Panel after the First Panel Meeting | B-36 |
Annex B-3 | Replies of the European Communities to Questions from India after the First Panel Meeting | B-68 |
Annex B-4 | Replies of India to Questions from the Panel after the Second Panel Meeting | B-83 |
Annex B-5 | Replies of the European Communities to Questions from the Panel after the Second Panel Meeting | B-111 |
Annex B-6 | Comments of India to the Replies of the European Communities to Question from the Panel after the Second Panel Meeting | B-141 |
Annex B-7 | Comments of the European Communities to the Replies of India to Questions from the Panel after the Second Panel Meeting | B-159 |
ANNEX C |
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Third Parties |
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Annex C-1 | Replies of the Andean Community Collectively to Questions from the Panel and from India after the First Panel Meeting | C-2 |
Annex C-2 | Replies of Members of the Andean Community Separately to Questions from the Panel and from India after the First Panel Meeting | C-9 |
Annex C-3 | Reply of Brazil to the Question from India after the First Panel Meeting | C-14 |
Annex C-4 | Replies of Costa Rica to Questions from the Panel and from India after the First Panel Meeting | C-15 |
Annex C-5 | Replies of El Salvador, Guatemala, Honduras and Nicaragua to Questions from the Panel after the First Panel Meeting | C-20 |
Annex C-6 | Replies of Panama to Questions from the Panel and from India after the First Panel Meeting | C-21 |
Annex C-7 | Replies of Paraguay to Questions from the Panel and from India after the First Panel Meeting | C-27 |
Annex C-8 | Replies of the United States to Questions from the Panel and from India after the First Panel Meeting |
C-40 |
ANNEX D |
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Annex D-1 | Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries (the "Enabling Clause") | D-2 |
Annex D-2 | Decision on Generalized System of Preferences (the "1971 Waiver Decision") | D-4 |
Annex D-3 | Resolution of the Second Session of UNCTAD on the Expansion and Diversification of Exports of Manufactures and Semi-Manufactures of developing countries ("Resolution 21 (II)) | D-6 |
Annex D-4 | Agreed Conclusions of the Special Committee on Preferences ("Agreed Conclusions") | D-8 |
ANNEX E |
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Annex E | List of Waivers for Preferences |
E-I |
I. INTRODUCTION
1.1 On 5 March 2002, pursuant to Article 4 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes
(hereafter the "DSU"), Article XXIII:1 of the General Agreement on Tariffs and
Trade 1994 (hereafter the "GATT 1994") and paragraph 4(b) of the Decision on
Differential and More Favourable Treatment, Reciprocity and Fuller Participation
of the Developing Countries1, (hereafter the "Enabling Clause"), India requested
consultations with the European Communities regarding the conditions under which
the European Communities accords tariff preferences to developing countries
under the scheme of generalized tariff preferences formulated under Council
Regulation (EC) No.. 2501/2001. The request was circulated to Members on 12
March 2002. 2
1.2 Consultations were held on 25 March 2002, but did not
lead to a mutually satisfactory resolution of this matter.
1.3 On 6 December 2002, India requested the Dispute
Settlement Body ("DSB") to establish a panel pursuant to Articles 4.7 and 6 of
the DSU and Article XXIII:2 of GATT 1994. 3
On 16 January 2003, India requested
the establishment of a panel for the second time. On 27 January 2003, the DSB
established the Panel with the following terms of reference:
"To examine, in the light of the relevant provisions of
the covered agreements cited by India in document WT/DS246/4, the matter
referred to the DSB by India in that document, and to make such findings as
will assist the DSB in making the recommendations or in giving the rulings
provided for in those agreements." 4
1.4 On 24 February 2003, India requested the Director-General
to determine the composition of the Panel pursuant to Article 8.7 of the DSU.
1.5 In its request for the establishment of a panel, India
made claims not only with respect to the European Communities' special
arrangements to combat drug production and trafficking, but also with respect to
the European Communities' special incentive arrangements for the protection of
the environment and labour rights. On 28 February 2003, during the meeting with
the Director-General regarding the composition of the Panel, India informed both
the European Communities and the Director-General that it had decided to limit
the present complaint to the tariff preferences granted by the European
Communities under its Drug Arrangements. India noted that no preferences had so
far been granted under the special incentive arrangements for the protection of
the environment and that only one country, Moldova, had thus far been accorded
preferences under the special incentive arrangements for the protection of
labour rights. India made it clear that it reserved its right to bring separate
new complaints on the environmental and labour arrangements if the European
Communities were to apply them in a manner detrimental to India's trade
interests or if the European Communities were to renew them after the lapse of
its current General System of Preferences scheme on 31 December 2004. India
confirmed the above in writing in a communication to the European Communities,
dated 3 March 2003.
1.6 On 6 March 2003, the Director-General determined the
composition of the Panel as follows:
1.7 Bolivia, Brazil, Colombia, Costa Rica, Cuba, Ecuador, El
Salvador, Guatemala, Honduras, Mauritius, Nicaragua, Pakistan, Panama, Paraguay,
Peru, Sri Lanka, the United States and Venezuela reserved their respective right
to participate in the panel proceedings as third parties. 6
1.8 On 31 March 2003, Bolivia, Colombia, Costa Rica, Ecuador,
El Salvador, Guatemala, Honduras, Nicaragua, Panama, Peru and Venezuela
requested the Panel's permission to attend all the Panel meetings, to present
arguments at such meetings, to receive copies of all submissions to the Panel,
to make submissions to the Panel at its second meeting and to review the draft
summary of arguments in the descriptive part of the Panel Report.
1.9 On 8 April 2003, the Panel asked for comments from the
parties and third parties regarding the above request. On 17 April 2003,
Pakistan also joined in the request for additional third-party rights. Brazil,
Cuba, Mauritius, Paraguay and the United States stated that all third parties
should be given the same treatment in the event that the Panel decides to grant
such additional rights to third parties.
1.10 On 7 May 2003, the Panel decided to provide the
following additional rights to all third parties:
observe the first substantive meeting with the
parties;
receive the second submissions of the parties;
observe the second substantive meetings with the
parties;
make a brief oral statement during the second
substantive meetings with the parties;
review the summary of their respective arguments in
the draft descriptive part of the Panel Report. 7
1.11 The Panel met with the parties on 14 and 16 May 2003 as
well as on 8 and 9 July 2003. The Panel met with the third parties on 15 May
2003. Further to the decision of 7 May 2003, third parties were given the
opportunity to observe the meeting of the Panel with the parties on 14 and 16
May 2003 and on 8 and 9 July 2003 as well as make brief statements on 9 July
2003.
1.12 The Andean Community consisting of Bolivia, Colombia,
Ecuador, Peru and Venezuela, the Central America countries of El Salvador,
Guatemala, Honduras and Nicaragua, forming respective groups for the purposes of
this dispute, as well as Costa Rica, Mauritius, Panama, Paraguay and the United
States presented third-party submissions at the first substantive meeting of the
Panel. These countries/groups, as well as Bolivia, Colombia, Ecuador, Peru and
Venezuela individually, and Pakistan, made oral statements during the first
substantive meeting of the Panel. Only the Andean Community, Colombia, Panama,
Paraguay and the United States made oral statements during the second
substantive meeting of the Panel.
1.13 The Panel issued its interim report to the parties on 5
September 2003. The Panel issued its final report to the parties on 28 October
2003.
II. FACTUAL ASPECTS
2.1 This dispute concerns the special arrangements to combat
drug production and trafficking (the Drug Arrangements) as provided in Council
Regulation (EC) No. 2501/2001 of 10 December 2001, applying a scheme of
generalized tariff preferences for the period from 1 January 2002 to 31 December
2004, as well as the implementation of the Drug Arrangements.
the scheme of generalized tariff
preferences adopted by the european communities
2.2 The European Communities applies a scheme of tariff
preferences for certain goods from developing countries and economies in
transition under Council Regulation (EC) No. 2501/2001 8
("the Regulation"). The
Regulation provides for five different tariff preference arrangements:
(i) the General Arrangements;
(ii) the Special Incentive Arrangements for the protection of
labour rights;
(iii) the Special Incentive Arrangements for the protection
of the environment;
(iv) the Special Arrangements for least-developed countries;
and
(v) the Special Arrangements to combat drug
production and trafficking (the "Drug Arrangements").
2.3 Tariff preferences under the General Arrangements are
accorded to the countries listed in Annex I to the Regulation. The additional
preferences under the Special Incentive Arrangements for the protection of
labour rights and the protection of the environment are accorded exclusively to
countries which are determined by the European Communities to comply with
certain labour and environmental policy standards. The additional preferences
under the Special Arrangements for least-developed countries are limited to the
least-developed countries listed in Annex I to the Regulation. The Drug
Arrangements currently apply to 12 countries. These various arrangements differ
in the depth of the tariff cuts provided, the products covered and the
requirements that must be met by eligible countries.
the general
arrangements
2.4 Under the General Arrangements, all the countries and
territories listed in Annex I to the Regulation are eligible to receive tariff
preferences. The products covered are listed in Annex IV to the Regulation.
These products are divided into two categories: non-sensitive and sensitive.
2.5 Article 7 of the Regulation specifies that non-sensitive
products will enjoy duty-free access while sensitive products are subject to
reduced tariffs. For sensitive products, the tariff duty reduction is calculated
by applying: (i) a flat rate reduction of 3.5 percentage points to the Common
Customs Tariff duties in the case of ad valorem duties (except for
products of Chapters 50 to 63 where the ad valorem duty is reduced by 20
per cent); or (ii) a 30 per cent reduction to the Common Customs Tariff duties
in the case of specific duties (except for products of CN code 2207 where the
specific duty is reduced by 15 per cent). Wherever the Common Customs Tariff
duty is expressed as a combination of an ad valorem duty and a specific
duty, the preferential reduction is limited to the ad valorem duty.
the drug
arrangements
2.6 Article 10 of the Regulation states:
"1. Common Customs Tariff ad valorem duties on
products, which according to Annex IV, are included in the special
arrangements to combat drug production and trafficking referred to in Title
IV and which originate in a country that according to Column I of Annex I
benefits from those arrangements, shall be entirely suspended. For products
of CN code 0306 13, the duty shall be reduced to a rate of 3.6 per cent.
2. Common Customs Tariff specific duties on products
referred to in paragraph 1 shall be entirely suspended, except for products
for which Common Customs Tariff duties also include ad valorem
duties. For products of CN codes 1704 10 91 and 1704 10 99 the specific duty
shall be limited to 16 per cent of the customs value."
2.7 The benefits under the Drug Arrangements currently apply
to 12 named countries: Bolivia, Colombia, Costa Rica, Ecuador, El Salvador,
Guatemala, Honduras, Nicaragua, Pakistan, Panama, Peru and Venezuela. The
products included under the Drug Arrangements are listed in column D of Annex IV
to the Regulation (the "covered products"). This list comprises products that
are included in the General Arrangements as well as several products which are
not included under the General Arrangements. The covered products enjoy
duty-free access to the European Communities' market, except for products of CN
codes 0306 13, 1704 10 91 and 1704 10 99, for which Article 10 of the Regulation
prescribes different tariff cuts. 9
2.8 The result of the Regulation is that the tariff
reductions accorded under the Drug Arrangements to the 12 beneficiary countries
are greater than the tariff reductions granted under the General Arrangements to
other developing countries. In respect of products that are included in the Drug
Arrangements but not in the General Arrangements, the 12 beneficiary countries
are granted duty free access to the European Communities' market, while
all other developing countries must pay the full duties applicable under the
Common Customs Tariff. In respect of products that are included in both the
Drug Arrangements and the General Arrangements and that are deemed "sensitive"
under column G of Annex IV to the Regulation with the exception for products of
CN codes 0306 13, 1704 10 91 and 1704 10 99, the 12 beneficiary countries are
granted duty-free access to the European Communities' market, while all
other developing countries are entitled only to reductions in the
duties applicable under the Common Customs Tariff.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 India requests the Panel to find that the Drug
Arrangements set out in Article 10 of Council Regulation No 2501/2001 are
inconsistent with Article I:1 of GATT 1994 and are not justified by the Enabling
Clause. 10
3.2 India requests the Panel to find that the Drug
Arrangements have nullified or impaired benefits accruing to India under the
GATT 1994. India argues that under Article 3.8 of the DSU, in cases where there
is an infringement of the obligations assumed under a covered agreement, the
action is considered to constitute a prima facie case of nullification or
impairment of benefits under that agreement. 11
3.3 India states that according to Article 19.1 of the DSU,
where a panel concludes that a measure is inconsistent with a covered agreement,
it shall recommend that the Member concerned bring the measure into conformity
with that agreement. Accordingly, India requests the Panel to recommend that the
DSB request the European Communities to bring the measure at issue into
conformity with the GATT 1994.
3.4 India also indicates that according to the second
sentence of Article 19.1 of the DSU, the Panel may suggest ways in which the
European Communities could implement the Panel's recommendation. For the reasons
set out in the introduction in its first submission, India requests the Panel to
suggest that the European Communities brings its measure into conformity with
its obligations under the WTO Agreement by:
(a) extending the tariff preferences granted under
the Drug Arrangements to all other developing country Members
consistently with the Enabling Clause; or
(b) obtaining a waiver from its obligations under
Article I:1 of GATT 1994 on terms and conditions satisfactory to
Members. 12
3.5 The European Communities maintains that the Enabling
Clause is an autonomous right not an affirmative defence and it excludes the
application of Article I. Consequently, in order to establish a violation of
Article I:1 of GATT 1994 or a violation of the Enabling Clause, India bears the
burden to establish the following:
(a) the Drug Arrangements are not covered by
paragraph 2(a) of the Enabling Clause but covered by Article I:1 of GATT
1994; or that,
(b) the Drug Arrangements are covered by paragraph
2(a) of the Enabling Clause but are inconsistent with paragraph 3(c). 13
3.6 In light of its position on the issue of allocation of
burden of proof in this dispute, the European Communities requests the Panel to
find:
(a) that the Drug Arrangements fall within the scope
of paragraph 2(a) of the Enabling Clause, not within that of Article
I:1, and therefore dismiss India's claim under that provision; 14
(b) that since India asserts that it is not making
any claim under the Enabling Clause, the Panel should refrain from
further examining whether the Drug Arrangements are consistent with
paragraph 3(c) of the Enabling Clause; 15 and,
(c) that all the claims brought by India in this
disputes should be dismissed based on reasons given by the European
Communities in the proceedings. 16
3.7 If the Panel were to find that the Drug Arrangements fall
within Article I:1of GATT 1994, and that they are prima facie
inconsistent with that provision, the European Communities requests the Panel to
find that they are justified under Article XX(b) of GATT 1994 and therefore
dismiss all the claims brought by India in this disputes.
17
first written
submission of india
4.1 The European Communities applies a scheme of tariff
preferences for certain goods from developing countries and economies in
transition under Council Regulation (EC) No. 2501/2001 of 10 December 2001
applying a scheme of generalized tariff preferences for the period from 1
January 2002 to 31 December 2004. 18 The Regulation provides for five different
tariff preference arrangements:
(a) the General Arrangements;
(b) the Special Incentive Arrangements for the protection of
labour rights;
(c) the Special Incentive Arrangements for the protection of
the environment;
(d) the Special Arrangements for least-developed countries;
and
(e) the Special Arrangements to combat drug
production and trafficking (the "Drug Arrangements").
4.2 Tariff preferences under the General Arrangements are
accorded to the countries listed in Annex I to the Regulation. The additional
preferences under the Special Incentive Arrangements for the protection of the
labour rights and the protection of the environment are accorded exclusively to
countries that are determined by the European Communities to comply with certain
labour and environmental policy standards. The additional preferences under the
Special Arrangements for least-developed countries are limited to the
least-developed countries listed in Annex I to the Regulation. The Drug
Arrangements are limited to Bolivia, Colombia, Costa Rica, Ecuador, El Salvador,
Guatemala, Honduras, Nicaragua, Pakistan, Panama, Peru and Venezuela (the
"preferred Members"). These various arrangements differ in the depth of the
tariff cuts provided, the products covered, the requirements that must be met by
eligible countries and the grounds on which tariff preferences can be reduced or
removed.
4.3 Under the General Arrangements, all the countries
and territories listed in Annex I to the Regulation are eligible to receive
tariff preferences. The products covered are listed in Annex IV to the
Regulation. These products are divided into two categories: non-sensitive and
sensitive.
4.4 Article 7 of the Regulation specifies that non-sensitive
products will enjoy duty-free access while sensitive products are subject to
reduced tariffs. For sensitive products, the tariff duty reduction is calculated
by applying: (i) a flat rate reduction of 3.5 percentage points to the Common
Customs Tariff duties in the case of ad valorem duties (except for
products of Chapters 50 to 63 where the ad valorem duty is reduced by 20
per cent); or (ii) a 30 per cent reduction to the Common Customs Tariff duty if
that tariff is expressed as a specific duty (except for products of CN code 2207
where the specific duty is reduced by 15 per cent). Wherever the Common Customs
Tariff duty is expressed as a combination of an ad valorem duty and a
specific duty, the preferential reduction is limited to the ad valorem
duty.
4.5 Article 10 of the Regulation states:
"1. Common Customs Tariff ad valorem duties on
products, which according to Annex IV, are included in the special
arrangements to combat drug production and trafficking referred to in Title
IV and which originate in a country that according to Column I of Annex I
benefits from those arrangements, shall be entirely suspended. For products
of CN code 0306 13, the duty shall be reduced to a rate of 3.6 per cent.
2. Common Customs Tariff specific duties on products
referred to in paragraph 1 shall be entirely suspended, except for products
for which Common Customs Tariff duties also include ad valorem
duties. For products of CN codes 1704 10 91 and 1704 10 99 the specific duty
shall be limited to 16 per cent of the customs value."
4.6 The benefits under the Drug Arrangements are limited to
the preferred Members. The products included under the Drug Arrangements are
listed in Column D of Annex IV to the Regulation (the "covered products"). This
list comprises products that are included in the General Arrangements as well as
several products which are not included under the General Arrangements. The
covered products enjoy duty-free access to the European Communities' market,
except where specifically provided in Article 10 of the Regulation.
4.7 It follows from the above that the tariff reductions
accorded under the Drug Arrangements to the preferred Members are greater than
the tariff reductions granted under the General Arrangements. In respect of
products that are included in the Drug Arrangements but not in the General
Arrangements, the preferred Members are granted duty-free access to the
European Communities' market, while all other developing countries must pay the
full duties applicable under the Common Customs Tariff. Furthermore, in
respect of products that are included in both the Drug Arrangements and the
General Arrangements and that are deemed "sensitive" under Column G of Annex IV
to the Regulation, the preferred Members are granted duty-free access to
the European Communities' market, while all other developing countries are
entitled only to reductions in the duties applicable under the Common
Customs Tariff.
(a) The Drug Arrangements are inconsistent with Article
I:1 of GATT 1994
4.8 The tariff preferences granted under the Drug
Arrangements are inconsistent with Article I:1 of the GATT, which requires the
European Communities to accord unconditional MFN treatment to products
originating in the territories of all Members. The MFN principle is a
fundamental norm of the rules-based multilateral trading system of the WTO. As
pointed out by the Appellate Body, this principle has "long been a cornerstone
of the GATT and is one of the pillars of the WTO trading system". Embodying this
principle, Article I:1 of GATT 1994 provides in relevant part:
"With respect to customs duties �, any advantage ...
granted by any [Member] to any product originating in � any other country
shall be accorded ... immediately and unconditionally to the like
product originating in � the territories of all other [Members]."
(emphasis added)
4.9 The MFN principle embodied in the GATT thus comprises two
equally important requirements: first, advantages related to customs duties must
be extended to all other Members and, second, the extension must be
immediate and unconditional.
4.10 The corresponding adjective of the adverb
"unconditionally" is "unconditional", which is defined as: "Not subject to or
limited by conditions; absolute, complete." 19 In applying Article I:1 of the GATT,
in Canada - Autos, the Appellate Body referred to the undisputed finding
of the panel that the "term 'unconditionally' refers to advantages conditioned
on the 'situation or conduct' of exporting countries". 20
The panel had found that:
"The purpose of Article I:1 is to ensure unconditional
MFN treatment. In this context, we consider that the obligation to accord
'unconditionally' to third countries which are WTO Members an advantage
which has been granted to any country means that the extension of that
advantage may not be made subject to conditions with respect to the
situation or conduct of those countries. This means that an
advantage granted to the product of any country must be accorded to the like
product of all WTO Members without discrimination as to origin." 21 (emphasis
added)
4.11 It follows from the above that a Member granting any
advantage to any product originating in any other country has the obligation to
accord that advantage to like products of all other Members regardless of
their situation or conduct.
4.12 The tariff preferences granted to covered products
originating in the preferred Members constitute an "advantage". Under the Drug
Arrangements, the European Communities imposes customs duties on imports of
covered products originating in the preferred Members at rates lower than those
imposed on like products originating in all other Members. 22 This accords an
advantage 23 to covered products originating in the preferred Members.
4.13 The advantages under the Drug Arrangements are available
only to the 12 preferred Members. The tariff preferences granted to the covered
products originating in the preferred Members are consequently not accorded to
like products originating in the territories of all other Members.
4.14 The European Communities fails to accord the advantage
of the tariff preferences to like products originating in the territories of
other Members unconditionally. The EC Regulation establishing the current GSP
scheme does not indicate on the basis of which criteria the preferred Members
were selected. The 1998 Regulation extending the previous GSP scheme indicates
that the Drug Arrangements were intended to benefit "countries undertaking
effective programmes to combat drug production and trafficking". 24 Whether or not
the European Communities has in fact applied this criterion uniformly to all
Members is legally irrelevant because Article I:1 of GATT 1994 does not permit
the European Communities to make the extension of the advantages under the Drug
Arrangements conditional upon the situation or conduct of the exporting
countries.
(b) The European Communities requested a waiver and
implemented the Drug Arrangements without obtaining a waiver
4.15 Under Article IX:3 of the Marrakesh Agreement
Establishing the World Trade Organization, a Member may apply for a waiver from
its obligations under that Agreement or any of the multilateral trade
agreements, including the obligations under Article I:1 of GATT 1994 .
4.16 The European Communities itself acknowledges that a
waiver from its obligations under Article I:1 of GATT 1994 was required before
it could apply the tariff preferences under the Drug Arrangements. On 24 October
2001, the European Communities submitted a request for a waiver with the
following explanation:
"The revised special arrangements to combat drug
production and trafficking that should apply from 1 January 2002 will be
open to eligible products listed in Annex I originating in Bolivia,
Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua,
Pakistan, Panama, Peru and Venezuela.
Because the special arrangements are only available to
imports originating in those Members, a waiver from the provisions of
paragraph 1 of Article I of GATT 1994 appears necessary before they can
effectively enter into force for reasons of legal certainty." 25 (emphasis
added)
4.17 The need to obtain a waiver has also been acknowledged
by the preferred Members that are member countries of the Andean Community,
namely Bolivia, Colombia, Ecuador, Peru, and Venezuela. This acknowledgement is
recorded in the Aide-Memoire of the Joint Andean Community-European
Commission Technical Evaluation Meeting on the Profitable Use of the Andean GSP,
as follows:
"In this context the CAN [Andean Community] pointed out
the need for the EC to obtain a waiver in order to continue granting
preferences to the drug-related regime in the face of pressure brought to
bear by countries that consider themselves affected by that regime." 26
4.18 The European Communities has thus far failed to obtain
the required waiver. Notwithstanding the absence of a waiver, the European
Communities decided to implement the Drug Arrangements.
4.19 As noted by the Appellate Body, "[T]he prohibition of
discrimination in Article 1:1 also serves as an incentive for concessions,
negotiated reciprocally, to be extended to all other Members on an MFN basis". 27
Any derogation from the obligation under Article I:1 of GATT 1994 upsets the
balance of rights and obligations resulting from market access negotiations. It
is therefore essential that any derogation from the MFN obligation is based on
conditions that maintain that balance. By implementing the Drug Arrangements
without the benefit of a waiver, the European Communities unilaterally upset the
balance of right and obligations under the GATT 1994 and deprived all other
Members, particularly the developing countries excluded from these arrangements,
of their right to compensation for the trade diversion to which they are
subjected.
(c) The European Communities bears the burden of
justifying its Drug Arrangements under the Enabling Clause
4.20 The European Communities bears the burden of
demonstrating that the Drug Arrangements are consistent with the Enabling
Clause. The Enabling Clause allows Members to derogate from their obligations
under Article I:1 of GATT 1994. The Enabling Clause therefore constitutes an
affirmative defence that the European Communities might invoke to justify an
inconsistency with Article I:1 of GATT 1994. The Member invoking an affirmative
defence has the burden of proving that defence. 28 Thus, should the European
Communities invoke the Enabling Clause as a defence, it bears the burden of
establishing that the Drug Arrangements are justified under the Enabling Clause.
4.21 For the sake of procedural efficiency, India will
present its views on this issue in this first submission.
4.22 The Enabling Clause does not absolve developed country
Members from their obligation to accord MFN treatment to products originating in
developing countries. Paragraph 1 of the Enabling Clause allows Members,
notwithstanding Article I of GATT 1994, to accord differential and more
favourable treatment to developing countries without according such treatment to
other Members under the situations enumerated in paragraph 2. In this dispute,
the relevant situation is that described under paragraph 2(a), i.e.,
preferential tariff treatment accorded by developed country Members to products
originating in developing countries in accordance with the GSP. Paragraphs 1 and
2(a) can be paraphrased as follows:
Notwithstanding the provisions of Article I of the GATT,
developed country Members may accord preferential tariff treatment to
products originating in developing countries in accordance with the GSP
without according such treatment to other Members.
4.23 Under Article I:1 of GATT 1994, any advantage, favour,
privilege or immunity granted to a product originating in any country shall be
granted immediately and unconditionally to the like product originating in all
other Members. "Other Members" include both developed and developing
country Members. Thus, under this rule there can be no discrimination between
like products of both developed and developing countries.
4.24 The Enabling Clause allows developed country Members to
accord preferential tariff treatment to products originating in developing
countries in accordance with the GSP without according such treatment to "other
Members". The Enabling Clause distinguishes between "developing countries" and
"other Members". The term "other Members" in this context thus refers to other
developed country Members. The phrase "notwithstanding the provisions of Article
I of the GATT" thus allows developed country Members to derogate from the
obligation to grant MFN treatment to products originating in developed
countries. However, nothing in the Enabling Clause modifies their obligation to
extend to all developing countries any advantage accorded to one of them.
4.25 This reading of paragraph 2(a) of the Enabling Clause is
confirmed by the exception made in paragraph 2(d) which permits:
"Special treatment of the least developed among the
developing countries in the context of any general or specific measures in
favour of developing countries."
4.26 There would be no need to permit in paragraph 2(d)
special treatment of the least-developed countries within the category of
"developing countries receiving favourable treatment" if paragraph 2(a) of the
Enabling Clause permitted developed country Members to accord advantages to a
selected group of developing countries
4.27 As pointed out above, the MFN principle embodied in
Article I:1 of GATT 1994 comprises two equally important requirements: First,
advantages related to customs duties must be extended to all other Members
and, second, the extension must be unconditional, that is independent of
the situation or conduct of the exporting country. The only function of
paragraph 2(a) of the Enabling Clause is to provide a partial exemption from the
first of these two requirements. There is nothing in the Enabling Clause that
addresses the second requirement. There is consequently nothing in the terms of
the Enabling Clause that provides a legal basis for preferences on conditions
related to the situation or conduct of the beneficiary developing countries.
4.28 The sole purpose of the Enabling Clause is to permit
Members to "accord differential and more favourable treatment to developing
countries without according such treatment to [other Members]." The Enabling
Clause provides for an exception from a fundamental principle of WTO law and
cannot therefore be interpreted to authorize measures that need not be taken to
achieve that purpose. In order to accord treatment to developing countries that
is more favourable than that accorded to developed countries, Members need not
limit their GSP preferences to a few selected developing countries and need not
accord GSP preferences conditional upon the situation or conduct of the
developing countries.
4.29 The Appellate Body has stated that panels should base
their interpretations on the terms of the WTO agreements and has ruled that the
process of interpretation cannot be used to introduce concepts into an agreement
that are simply not there.
29 The Enabling Clause establishes a carefully
negotiated exception from a fundamental norm of the rules-based multilateral
trading system. This requires the Panel to apply the principles of
interpretation developed by the Appellate Body with particular care. If the
Panel were to interpret the Enabling Clause to permit developed countries to
discriminate between developing countries by making the extension of tariff
preferences subject to conditions with respect to the situation or conduct of
those countries, it would introduce a concept that the drafters of this Clause
never contemplated. The Enabling Clause would then no longer be the legal basis
for GSP schemes beneficial to all developing countries but for tariff
preferences under which market access benefits are diverted from some to other
developing countries to realize the foreign policy objectives of the developed
countries. There is no clear and explicit wording on which the Panel could base
an interpretation with such serious consequences. Furthermore, the Panel cannot
adopt an interpretation that promotes discrimination. The Preamble to the
Marrakesh Agreement Establishing the World Trade Organization, which forms part
of the "context � object and purpose" 30
of the WTO Agreement, provides, inter
alia:
"Being desirous of contributing to these
objectives by entering into reciprocal and mutually advantageous
arrangements directed � to the elimination of discriminatory treatment in
international trade relations," (emphasis added)
4.30 Consequently, the Enabling Clause does not absolve the
European Communities from its obligation to accord MFN treatment to products
originating in developing countries.
(d) The Drug Arrangements cannot be justified under the
Enabling Clause
4.31 The Enabling Clause justifies only preferences that do
not discriminate between developing countries. Paragraph 2(a) of the Enabling
Clause authorizes preferential treatment "in accordance with the Generalized
System of Preferences". Footnote 3 defines the term "Generalized System of
Preferences" as the system described in the 1971 Waiver relating to the
establishment of "generalized, non-reciprocal and non-discriminatory
preferences beneficial to the developing countries." (emphasis added)
4.32 While the Enabling Clause does not establish the
obligation to grant preferences, it does not permit any preference under
any scheme called GSP but only preferences accorded in the framework of
GSP schemes as described in the 1971 Waiver. This means, inter alia, that
the preferences must be non-discriminatory between developing countries.
Developed country Members applying preferential schemes that do not meet this
requirement have often obtained a waiver. 31
4.33 The preferences under the Drug Arrangements discriminate
between developing countries because they are not extended to all developing
countries. The benefits under the Drugs Arrangements are limited to the 12
preferred Members specifically designated by the European Communities. The
ordinary meaning of the verb "discriminate" is "to make or constitute a
difference in or between; distinguish; differentiate" and "to make a distinction
in the treatment of different categories of people or things". 32 Hence,
"non-discriminatory" preferential treatment of developing countries means
treatment that does not make a distinction between different categories of
developing countries. Preferential tariff schemes limited to a named group of
developing countries cannot be characterized as "non-discriminatory" on any
reasonable construction of this term. By limiting the Drug Arrangements to the
12 preferred Members, the European Communities discriminates between developing
countries.
4.34 Even if the European Communities were to establish that
the preferred Members are the only developing countries that are undertaking
effective programmes to combat drug production and trafficking, the Drug
Arrangements would still not be consistent with the requirement of
non-discrimination set out in the Enabling Clause. As pointed out above, there
is nothing in the Enabling Clause that exempts the European Communities from the
obligation under Article I:1 of GATT 1994 to extend the tariff preferences
accorded under the Drug Arrangements unconditionally to all developing
countries. GSP preferences conditional upon the beneficiaries' drug-related
situation and conduct are therefore not covered by the Enabling Clause.
Furthermore, making a distinction in the treatment of developing countries on
the basis of their drug-related situation is discriminatory.
4.35 The Enabling Clause covers only preferences that are
beneficial to all developing countries and are designed to respond positively to
their needs. As pointed out above, paragraph 2(a) of the Enabling Clause covers
only preferences that are "beneficial to the developing countries". 33 The
use of the definite article "the" with reference to "developing countries" makes
clear that the GSP schemes must benefit all developing countries.
4.36 Furthermore, paragraph 3(c) of the Enabling Clause
provides:
"3. Any differential and more favourable treatment
provided under this clause:
(c) shall in the case of such treatment accorded by
developed contracting parties to developing countries be designed and, if
necessary, modified to respond positively to the development, financial and
trade needs of developing countries."
4.37 The requirement that the differential and more
favourable treatment of developing countries be designed to respond positively
to their needs is phrased as an obligation ("shall") that developed countries
must observe when applying the preference schemes authorized under paragraph
2(a), that is GSP schemes as described in the 1971 Waiver.
4.38 The Drug Arrangements are not beneficial to all
developing countries. As pointed out in the introductory section of this
submission, the tariff preferences accorded by the European Communities to the
12 beneficiary countries do not involve a transfer of resources from the
European Communities to those countries. The main effect of the preferences is
to shift market access opportunities from the developing countries that are
excluded from the regime to the countries selected by the European Communities.
To that extent, the true "donor" under the Drug Arrangements is not the European
Communities but each of the countries in the Americas, Africa and Asia that
suffers from the trade diversion caused by the preferences. For example, in the
case of the tariff preferences accorded to textiles and clothing products from
Pakistan, the true "donor" countries are India and other developing countries
that compete directly with Pakistan's exports to the European Communities. The
tariff preferences under the Drug Arrangements are beneficial to some developing
countries and detrimental to others and consequently do not comply with
paragraph 2(a) of the Enabling Clause.
4.39 The Drug Arrangements are not designed to respond
positively to the development, financial and trade needs of developing
countries. The Drug Arrangements cover countries that are a source of production
and export of illegal drugs consumed in the European Communities. The European
Communities depends on the cooperation of these countries to resolve its own
drug problems. The preferences accorded under the Drug Arrangements have
therefore been designed to respond positively to the needs of the European
Communities rather than those of developing countries.
4.40 In summary, there are three basic conditions that a
developed country Member applying a GSP scheme must observe: first, the scheme
must not discriminate between developing countries; second, it must be
beneficial to all developing countries; and third, it must be designed to
respond positively to the needs of developing countries. These conditions all
have the same basic function, namely to ensure that GSP schemes operate as
instruments to promote development and not as instruments to promote the foreign
or commercial policy objectives of the developed countries. It is therefore
important that the provisions of the Enabling Clause establishing these
conditions are observed by developed country Members that have decided to accord
preferences to developing countries.
4.41 The Drug Arrangements do not meet any of these
conditions. They discriminate between developing countries because they apply
only to 12 developing countries. They are not beneficial to the developing
countries because they create market access opportunities for some of them at
the expense of others. And, finally, they are not designed to respond positively
to the needs of developing countries but those of the European Communities. The
Drug Arrangements have for these reasons no resemblance with the GSP schemes
authorized under the Enabling Clause.
first written
submission of the european communities
(a) The Enabling Clause excludes the application of
Article I:1 of the GATT
4.42 The Enabling Clause is not an "affirmative defence"
justifying a violation of Article I:1. It is a self-standing regime which
excludes the application of Article I:1. Unlike its predecessor, the Decision of
the CONTRACTING PARTIES of 25 June 1971 (the "1971 Waiver"), the Enabling Clause
is a not a temporary waiver from Article I:1 of GATT 1994. The Enabling Clause
confers an autonomous and permanent right to grant certain types of
"differential and more favourable treatment" to developing countries
"notwithstanding Article I:1 of the GATT". This right is one of the most
important and tangible expressions of the principle of "special and differential
treatment" for developing countries included in the WTO Agreement.
4.43 Similarly, in Brazil - Aircraft the Appellate
Body held that Article 27 of the Agreement on Subsidies and Countervailing
Measures ("SCM Agreement"), a provision granting "special and differential
treatment" to developing countries with respect to export subsidies, was not an
"affirmative defence", but rather excluded the application of Article 3.1(a) of
the same Agreement. Like Article 27 of the SCM Agreement, the Enabling Clause
provides "special and differential treatment" to developing countries by
conferring to all Members the right to accord certain types of "differential and
more favourable treatment" to developing countries.
4.44 The fact that the Enabling Clause is not an "affirmative
defence" but an autonomous right has two important implications for this
dispute, namely, first, in order to establish a violation of Article I:1 of GATT
1994, India must establish first that the Drug Arrangements are not covered by
paragraph 2(a) of the Enabling Clause; and second, as the complaining party,
India bears the burden of proving that the Drug Arrangements are not covered by
paragraph 2(a) and, if covered, that they are inconsistent with paragraph 3(c).
(b) The Enabling Clause does not impose an obligation to
accord unconditional MFN treatment to the developing countries
(i) The Enabling Clause does not impose an obliation to
grant "differential and more favourable treatment" to all developing
countries on an MFN basis
4.45 In paragraph 1 the term "developing countries" is not
preceded by any qualifying term suggesting that "differential and more
favourable treatment" must be granted necessarily to all developing
countries. If a Member grants "differential and more favourable" treatment to
some developing countries, such treatment falls within the ordinary meaning
of the phrase "differential and more favourable treatment to developing
countries".
4.46 India's reading whereby the term "other Members" in
paragraph 1 refers to "developed countries" is not warranted by the ordinary
meaning of that term. If a Member grants preferences to some developing
countries, any Member that does not receive such preferences (whether developed
or developing) falls within the ordinary meaning of the term "other Members".
Contextually, this is confirmed in particular by footnote 3 to paragraph 2(a),
as well as by paragraphs 2(c) and 2(d) of the Enabling Clause.
4.47 Footnote 3 provides that the preferences granted under
paragraph 2(a) must be "non-discriminatory". This does not imply that all
developing countries must be granted identical preferences and it does not
prevent developed countries from treating differently developing countries
which, according to objective criteria, have different development needs.
4.48 Paragraph 2(d) allows developed Members to give "special
treatment" to the "least developed among the developing countries". This is not
an "exception" to paragraph 1 but one of the types of measures authorized by
paragraph 1 as evidenced by the introductory clause of Paragraph 2. The
"following" includes letter (d) of Paragraph 2. Therefore, Paragraph 1 "applies"
also to that letter. If paragraph 1 prohibited differentiation between
developing countries, it would be impossible to reconcile paragraph 2(d), which
expressly envisages such differentiation, with paragraph 1.
4.49 Paragraph 2(d) would not become redundant if paragraph
2(a) allowed differentiation among developing countries. While paragraph 2(a) is
concerned exclusively with "preferential tariff treatment", paragraph 2(d)
covers any kind of "special treatment", including therefore non-tariff
preferences. Furthermore, paragraph 2(d) applies in the context of "any general
or specific measures" in favour of developing countries, while the preferences
envisaged in paragraph 2(a) must be part of a generalized system of preferences.
4.50 Finally, paragraph 2(c) allows developing countries to
enter into "regional or global arrangements" for the "mutual reduction or
elimination of tariffs". By definition, these "regional" arrangements do not
include all developing countries. Thus, if paragraph 1 did not allow the
granting of "differential and more favourable treatment" to some
developing countries, the regional arrangements mentioned in paragraph 2(c)
would fall outside the scope of paragraph 1.
(ii) The Enabling Clause does not impose an obligation to
grant differential and more favourable treatment "unconditionally"
4.51 Nothing in paragraphs 1, 2 or 3 imposes an obligation to
grant preferential treatment "unconditionally". Quite to the contrary, such
requirement could not be reconciled with footnote 3 to paragraph 2(a) and
paragraph 2(c) of the Enabling Clause.
4.52 A tariff preference is "conditional" within the meaning
of Article I:1 of GATT 1994 when it is provided in exchange for some form of
compensation. On the other hand, the notion of "reciprocity" involves a mutual
exchange of the same or similar benefits. Thus, in the specific context of a
trade agreement such as the WTO Agreement, the term "reciprocal" refers to those
conditions which require the granting of equivalent trade concessions by way of
compensation for the trade benefits received from another Member.
4.53 Footnote 3 to paragraph 2(a) of the Enabling Clause only
prohibits conditions of reciprocity. It does not prohibit other conditions
providing for non-reciprocal compensation. If the preferences granted under the
Enabling Clause had to be "unconditional" in any event by virtue of Article I:1
GATT 1994, it would have been superfluous to specify in paragraph 2(a) that the
preferences granted as part of a GSP scheme must be "non-reciprocal".
4.54 Additionally, "regional or global arrangements" for the
"mutual reduction or elimination of tariffs" under paragraph 2(c) are, by
definition, "conditional" because they consist of a reciprocal exchange of
tariff concessions. If any preferences granted to developing countries under the
Enabling Clause had to be "unconditional", any "global" or "regional"
arrangement entered into under paragraph 2(c) would be in breach of Article I:1
of GATT 1994.
(iii) In any event, the Drug Arrangements are
"unconditional"
The case law on the interpretation of the term
"unconditionally"
4.55 The term "unconditionally" has not been interpreted yet
by the Appellate Body. It has been addressed in two panel reports, Indonesia
- Autos and Canada - Autos, which have reached different and
conflicting interpretations. Both interpretations are incorrect. In Indonesia
- Autos, the panel cited a 1952 panel report, Belgian Family Allowances,
which is notoriously unclear. Belgian Family Allowances is not relevant
for the interpretation of "unconditionally" but instead for the interpretation
of the term "like". It stands for the proposition that differences in treatment
of imports cannot be based on differences in characteristics of the exporting
country which do not result in differences in the goods themselves, because such
differences do not make the goods "unlike".
4.56 The interpretation made in Indonesia - Autos was
effectively rejected in Canada - Autos. However, the Panel also failed in
this case to give meaning to the term "unconditionally" because Article I:1 does
not say that conditions must be imposed on an MFN basis, but instead that MFN
treatment must be accorded "unconditionally". This means that certain
"conditions" are prohibited per se, irrespective of whether they are
applied discriminatorily. However, contrary to the findings of the panel in
Indonesia - Autos, the prohibited conditions are not those which are
unrelated to the imported goods, but instead those which require providing some
form of compensation for receiving the MFN treatment.
The ordinary meaning of "unconditionally"
4.57 An obligation or a right is "conditional" when its
existence is dependent upon the occurrence of a certain event as evidenced by
various dictionary definitions. Legal classifications that distinguish among
persons, things or countries based on inherent or relatively permanent
characteristics are not, properly speaking, "conditions". Indeed, if such
distinctions were considered as "conditions", all laws or regulations would have
to be characterized as "conditional" because it is in the nature of laws or
regulations to draw that kind of distinction.
4.58 The selection of the beneficiary countries of the Drug
Arrangements is made by the European Communities' authorities on the basis of an
overall assessment of the gravity of the drug problem in each developing
country. Whether or not a developing country is particularly affected by the
drug problem at the time when the selection of the beneficiaries is made is not
a "future" or "uncertain" event. It is an existing and relatively permanent
situation which is both certain and known to the European Communities
authorities and, therefore, cannot be considered as a "condition".
4.59 India's view that treating differently, Members which
are in a different "situation", amounts to a "condition", together with India's
contention that paragraph 1 of the Enabling Clause does not "exempt" from the
obligation to accord the preferences "unconditionally", leads to an absurd
result when applied to paragraph 2(d) of the Enabling Clause. The distinction
between least-developed countries and other developing countries envisaged by
paragraph 2(d), like the distinction between developing countries particularly
affected by the drug problem and other developing countries, is also related to
the "situation" of those countries. Thus, on India's construction, any
preferences granted to the least-developed countries would be "conditional" and,
therefore, prohibited by Article I:1 of GATT 1994.
4.60 India's interpretation of the term "unconditionally" is
based upon a passage included in the panel report in Canada - Autos,
which is a mere obiter dictum insofar as it alludes to the
situation of countries. Moreover, the Appellate Body did not endorse the
dictum but neither did it address at all the meaning of "unconditionally".
The meaning of "unconditionally" in the context of MFN
clauses
4.61 In the context of MFN clauses, the term
"unconditionally" alludes to a specific type of "condition", namely to those
conditions that require providing some concession by way of compensation for
receiving MFN treatment. Article I:1 of GATT 1994 was modelled on the
standard MFN clause of the League of Nations, which in turn derived from similar
clauses included in bilateral trade agreements. This was preceded by various
"conditional" and "unconditional" treaties which were concluded by the United
States and European countries. The difference between the "unconditional" and
"conditional" form of the MFN clause was already explained by the U.S.
Department of State and in the reports of the Economic Committee of the League
of Nations. Additionally, the same notion of conditional MFN is reflected in the
Draft Articles on the Most-Favoured-Nation Clause of the
International Law Commission. They distinguish between, on the one hand, MFN
clauses that are "not made subject to compensation" and, on the other hand, two
types of conditional MFN clauses: those "subject to reciprocal treatment" and
those "subject to a condition of compensation" other than a condition of
reciprocity. The term "condition of compensation" is defined as a "condition
providing for compensation of any kind", whereas "condition of reciprocal
treatment" is defined as "condition of compensation providing for the same or,
as the case may be, equivalent treatment".
4.62 Contrary to this traditional understanding of
"conditionality" the beneficiaries of the Drug Arrangements are not required to
grant any trade concessions or to provide any other compensation of any kind to
the European Communities.
(c) The Drug Arrangements are consistent with the
Enabling Clause
(i) The Drug Arrangements are "non-discriminatory"
4.63 The "non-discrimination" standard set out in paragraph
2(a) is different from the MFN standard in Article I:1 of GATT 1994. While
Article I:1 of GATT 1994 is concerned with providing equal conditions of
competition for imports from all Members, the purpose of the Enabling Clause is
to promote the trade of all developing country Members commensurately with their
respective development needs.
4.64 Paragraph 2(a) does not prevent Members from treating
differently developing countries which, according to objective criteria, have
different development needs. Treating differently situations that are
objectively different is not discriminatory. Different treatment may even be
necessary in order to avoid indirect discrimination, as well as to comply with
the requirement in paragraph 3(c) of the Enabling Clause that the preferences
must respond positively to the development needs of developing countries.
The interpretation of the term "non-discriminatory" in
paragraph 2(a)
4.65 In the English language, the verb "discriminate" has a
neutral and a "negative" meaning with the latter the most common when used in a
legal context. This is evidenced by relevant literature and jurisprudence of
international and municipal tribunals. "Discrimination" only occurs if equal
situations are treated unequally (or if unequal situations are treated equally).
This requires considering whether the distinction pursues a legitimate aim and
whether there is a "sufficient" connection between that objective, the nature of
the distinction and the differences between the situations concerned on which
the distinction is based.
4.66 Contextually, paragraph 3(c) of the Enabling Clause
refers to "development, financial and trade needs of developing countries" which
are the individual needs of those countries. Those needs may vary between
different categories of developing countries, as well as over time. In fact, the
provision that the preferences shall be "modified, if necessary", assumes that
those needs will vary.
4.67 Additional contextual guidance is provided by Article
III:4 as interpreted by US - Section 337 and Korea - Various Measures
on Beef. Equally, Article XVII of the General Agreement on Trade in Services
("GATS") provides that the national treatment standard in that provision does
not require formally equal treatment. These provisions illustrate that in some
cases formally unequal treatment may be required in order to achieve a given
standard of equality. The chapeau of Article XX of GATT 1994 also confirms that
in assessing the existence of "discrimination" between countries it must be
taken into account whether the same conditions prevail in the countries
concerned. It is implicit in the chapeau that there is no "discrimination" if
two countries are treated differently because different conditions prevail in
each of them and, by the same token, that equal treatment of unequal conditions
may amount to discrimination. This was recognized by the Appellate Body in US
- Shrimp.
4.68 Finally, Article XIII shows that in the context of the
GATT formal inequality is not synonymous with "discrimination". The existence of
discrimination must be established having regard to the specific objective of
each provision where the non-discrimination requirement is found. The objective
of the Enabling Clause is to promote the exports from the developing countries
commensurately with their respective development needs. Having regard to that
objective, it is not discriminatory to grant additional preferences to those
developing countries that have special development needs.
4.69 The object and purpose of paragraph 2(a) the Enabling
Clause is expressed in the first recital of the 1971 Waiver, to which footnote 3
of the Enabling Clause refers as corroborated by Paragraph 3 of Article XXXVI of
GATT 1994 and the Preamble to the WTO Agreement. The above provisions set forth
the objective of promoting the trade of all developing countries, and not
just of the most "competitive" amongst them. Furthermore, the growth in trade
must be commensurate with their development needs. That objective is best
achieved if tariff preferences are designed so as to take into account that some
developing countries have special development needs.
4.70 The European Communities' interpretation of the term
"non-discriminatory" furthers the above objectives of the Enabling Clause and
the WTO Agreement because it allows providing additional preferences to the
developing countries with special development needs, so that they can secure a
share of international trade which is commensurate with those special
needs.
Treating differently the developing countries that are
particularly affected by the drug problem is not "discriminatory"
4.71 The General Assembly of the United Nations recognized
that the drug problem is often related to development problems and that those
links and the promotion of the economic development of countries affected by the
illicit drug trade require, within the context of shared responsibility,
strengthened international cooperation in support of alternative and sustainable
development activities. The International Narcotics Control Board (INCB) also
concludes that illicit drug production and trafficking prevents long-term growth
in the developing countries affected by that problem. It destabilises the
economy and the political system as well as the civil society. Finally, the
United Nations International Drug Control Programme ("UNDCP") concluded that the
short-term gains of illicit drug production and trafficking "are far outweighed
by the social and economic ills ushered in by illicit drugs", such as lower
productivity, the spread of AIDS, environmental decay and the increased risk of
armed conflicts.
4.72 In order to fight effectively the drug problem it is
necessary to apply a balanced approach, which combines initiatives to reduce the
illicit demand for drugs with those to reduce their illicit supply. In turn, the
latter requires complementing the actions to eradicate illicit production and
suppress illicit trafficking with the promotion of alternative economic
activities. Trade preferences support those alternative activities and,
therefore, constitute an appropriate response to the special development needs
of those developing countries which are particularly affected by the drug
problem.
4.73 This strategy is in line with the relevant UN
Conventions, in particular with the 1988 Convention Against Illicit Traffic
in Narcotic Drugs and Psychotropic Substances, which envisages expressly
that the parties may cooperate to increase the effectiveness of efforts to
control the supply of drugs by supporting alternative economic activities. It is
also in line with the guidelines adopted by the International Conference on
Drug Abuse and Illicit Trafficking held in Vienna in 1987 or the Political
Declaration adopted by the General Assembly of the United Nations on 23 February
1990. Of particular importance is the Action Plan on International
Co-operation on the Eradication of Illicit Drug Crops and on Alternative
Development adopted by the General Assembly of the United Nations in 1998
(the "1998 Action Plan"). This plan provides that the States concerned should
adopt national crop reduction and elimination strategies and that such
strategies should include "comprehensive measures such as programmes in
alternative development, law enforcement and eradication". According to the 1998
Action Plan, "the development and implementation of alternative development is
primarily the responsibility of the State in which illicit cultivation takes
place". Nevertheless, the 1998 Action Plan recognizes that the success of
alternative development depends on the support of the international community.
Accordingly, other States and the UN organizations are encouraged to provide
adequate financial and technical assistance. As a complementary measure, other
States are also encouraged to provide greater access to their markets.
4.74 The call to provide greater market access was renewed by
the General Assembly of the United Nations in its resolution of 19 December 2001
and the resolution of the UN Commission on Narcotic Drugs of 15 March 2002. The
importance of providing greater access to international markets has also been
acknowledged in the preamble of the Agreement on Agriculture. Finally,
the European Communities recalls that another WTO Member, the United States,
grants trade preferences to the Andean countries under the Andean Trade
Preference Act ("ATPA") with the same objective as the European Communities
under the Drug Arrangements. The ATPA was granted a waiver in 1992, that was
renewed in 1996.
The application of the Drug Arrangements is
"non-discriminatory"
4.75 The designation of the beneficiary countries of the Drug
Arrangements is based on an overall assessment of the gravity of the drug
problem in each developing country made in accordance with objective,
non-discriminatory criteria. That assessment takes into account the importance
of the production and/or trafficking of drugs in each country, as measured on
the basis of available statistics, as well as their effects. In this regard, it
is recalled that the implications of the drug problem are multifaceted. The
selection of beneficiary countries thus aims at taking into account all relevant
circumstances, including in particular: the impact on the economic situation;
the health and environmental impact; and the impact on the stability of the
State and the civil society.
4.76 Coca products (coca leaf, coca paste, cocaine, crack,
free base) and opium products (opium, morphine, heroin) account for the bulk of
the global illicit drug trade in monetary terms and are the illicit drugs that
have the most socio-economic impact world-wide. Accordingly, the selection of
the beneficiaries is based on data relating two those types of narcotic drugs.
4.77 The geographical patterns of drug trafficking are less
stable than those of drug production. Nevertheless, the amount of drug seizures
in the various countries allows charting of certain trafficking routes. Thus,
opiates come mainly from Afghanistan via Pakistan and Iran into the European
Union, while cocaine is shipped from the Andean countries to North America and
the European Union via Central America and the Caribbean. Seizures of cocaine
are concentrated in the Americas, with the Central American and Andean countries
playing a preponderant role.
4.78 The selection of the 12 beneficiary countries of the
Drug Arrangements is non-discriminatory. The relevant statistics on the
production and seizures of drugs support European Communities' contention. 34
(a) The main opium production figures are as follows: 35
Fig. 1 Production of opium (in metric tonnes
(b) The main coca leaf producers and their production
figures are: 36
Fig. 2 Production of coca leaf (in metric tons)
Chairman:
Mr Julio Lacarte-Mur�
Members:
Professor Marsha A. Echols
Professor Akio Shimizu 5
)
1999
2000
2001
2002 (estim.)
Average
Afghanistan
4,565
3,276
185
3,422
2,862
Myanmar
865
1,087
1,097
829
970
Laos
124
167
134
124
137
Colombia
88 (102)
88
88
n.a.
88 (93)
1999 | 2000 | 2001 | Average | |
Colombia | 260,995 (195,000) |
266,161 | 236,035 | 254,397 (232,340) |
Peru | 69,200
(72,500) |
54,400 | 49,260 | 54,903 (56,003) |
Bolivia | 22,800 | 13,400 | 20,200 | 18,800 |
(c) The figures for the main opium seizures are:
Fig. 3 Seizures of opium (in kgs.) 37
Fig.4 Seizures of heroin and morphine (in kgs.) 38
Fig.5 Seizures of cocaine (in kgs.) 39
(ii) The Drug Arrangements are "beneficial to the
developing countries"
4.79 India's argument that the use of the definite article
the before the term "developing countries" in footnote 3 "makes clear
that the GSP schemes must benefit all developing countries" is by no
means required by the ordinary meaning of footnote 3. To say that the
preferences must be "beneficial to the developing countries" is not the
same as saying that they must be beneficial to all developing countries,
let alone that they must be beneficial to each and every developing
country. The phrase "beneficial to the developing countries" means simply that
the preferences must be beneficial to the developing countries which
receive them, rather than to the developed countries which grant them.
The question of whether preferences may be granted to some developing
countries is specifically addressed by the requirement that preferences must be
"non-discriminatory". As shown above, that term does not require that the same
preferences be granted to each and every developing country.
4.80 In the alternative, the European Communities submits
that it would be entirely consistent with the ordinary meaning of the phrase
"beneficial to the developing countries" to consider that this requirement is
met if, overall, a preference is beneficial to all the developing countries
taken together.
4.81 Furthermore, potentially, the Drug Arrangements are
"beneficial" to each and every developing country because the list of
beneficiaries may be extended to cover any developing country which, following a
change of circumstances, qualifies as a country particularly affected by the
production or trafficking of drugs.
4.82 Contextually, first, the requirement that the
preferences must be "non-discriminatory" does not imply that identical
preferences must be granted to all developing countries. Yet, if the preferences
had to be "beneficial" to each and every developing country, it would be
necessary to accord identical preferences to all developing countries. Thus,
India's interpretation would render redundant the requirement that the
preferences must be "non-discriminatory".
4.83 Second, footnote 3 is attached to paragraph 2(a) which
refers to "preferential tariff treatment accorded � to products originating in
developing countries", rather than "� in the developing countries". In
turn, paragraph 2(a) applies within the framework of paragraph (1), which
authorizes "differential and more favourable treatment to developing countries",
and not to "the developing countries". By India's own logic, the omission
of the word "the" before "developing countries" in paragraphs (1) and
2(a) would confirm that, as argued by the European Communities, developed
countries are authorized to grant preferences to some developing
countries. Thus, India's interpretation of the phrase "beneficial to the
developing countries" would give rise to a conflict between footnote 3 and those
two provisions.
4.84 Third, India's interpretation would prevent developed
countries from responding to the individual development needs of developing
countries, contrary to the requirement set forth in paragraph 3(c) of the
Enabling Clause.
4.85 Finally, it is recalled that the Implementation Decision
adopted by the WTO Ministerial Conference at Doha reaffirms that "preferences
granted to developing countries pursuant to the Decision of the Contracting
Parties of 28 November 1979 ('Enabling Clause') should be generalized,
non-reciprocal and non-discriminatory." The fact that the Ministerial Conference
did not deem it necessary to reaffirm that the preferences should be "beneficial
to the developing countries" is evidence that this phrase cannot have the
far-reaching implications asserted by India. Furthermore, by referring to
"preferences granted to developing countries", rather than to "the
developing countries" the Implementation Decision provides further confirmation
that preferences do not have to be granted to each and every developing country.
4.86 India's interpretation of the phrase "beneficial to
developing countries" would run contrary to the object and purpose of the
Enabling Clause and the WTO Agreement to promote the exports of developing
countries commensurately with their respective development needs.
(iii) The Drug Arrangements respond positively to the
needs of developing countries
4.87 India's argument that the Drug Arrangements are not
designed to respond positively to the needs of developing countries is
manifestly unfounded and illogical. It amounts to saying that because drug abuse
is a concern of the European Communities, drug production and trafficking can
have no bearing on the development needs of the countries affected by that
problem. This is an obvious non-sequitur.
4.88 There is a close link between drugs and development,
with the consequence that the countries which are particularly affected by the
drug problem have special development needs. As demonstrated above, the Drug
Arrangements have been designed to respond to those needs by supporting
alternative economic activities, a strategy which is in conformity with UN
recommendations.
4.89 Furthermore, the European Communities recalls that the
Agreement on Agriculture has recognized that providing greater access to the
markets of the developed countries is an appropriate response to the particular
development needs of the countries most affected by the drug problem.
4.90 It is recalled also that, when granting the ATPA waiver,
the WTO recognized expressly that those preferences responded to the development
needs of the beneficiary countries. There is no fundamental difference between
the ATPA preferences and the European Communities' Drug Arrangements, other than
the country coverage, and, therefore, no valid reason to consider that the Drug
Arrangements, unlike the ATPA preferences, do not respond to the development
needs of the beneficiaries.
(a) Introduction
4.91 In the event that the Panel were to find that the Drug
Arrangements fall outside the scope of paragraph 2(a) of the Enabling Clause, or
that they are inconsistent with paragraph 3(c), the European Communities submits
that the Drug Arrangements would be justified under Article XX(b) of GATT 1994
as being necessary for the protection of human life or health in the European
Communities.
(b) The Drug Arrangements are necessary for the
protection of human life or health
(i) Drugs pose a risk to human life or health
4.92 The European Communities considers to be beyond dispute
that narcotic drugs pose a risk to human life or health in the European
Communities. Indeed, as recognized by the General Assembly of United Nations,
"drugs are a grave threat to the health and well-being of all mankind". The
narcotic drugs which are produced in, or which transit through, the territories
of the beneficiary countries, i.e. coca products (coca leaf, coca paste,
cocaine, crack, free base) and opium products (opium, morphine, heroin) pose
particularly serious risks to human life and health as described by the United
Nations Office on Drugs and Crime ("UNODC").
4.93 According to the European Monitoring Centre for Drugs
and Drugs Addiction (the "EMCDDA"), between 7,000 and 8,000 direct or "acute"
drug-related deaths are reported every year in the whole of the European
Communities. To this must be added a much larger number of indirect drug related
deaths, which are the consequence of associated risks, such as infectious
diseases acquired through a drug using habit/way of life, e.g. HIV/AIDS,
complications arising from an infection acquired through long-term drug misuse,
e.g. hepatitis causing liver failure, violent deaths related to the supply
and/or use of illegal drugs and accidents (including road traffic accidents)
arising from impaired judgement as a result of the consumption of drugs.
4.94 The EMCDDA has estimated that, as a result of the direct
and indirect risks posed by drugs, the overall mortality rate among problem drug
users in the European Communities is up to 20 times higher than among the
general population of the same age.
4.95 The concern with the health and other social problems
caused by narcotic drugs is universal and has led to the adoption of a
comprehensive system of international control of those substances. At present,
that system is based on the Single Convention on Narcotic Drugs, 1961, as
amended by the 1972 Protocol (the "1961 Convention") and the Convention against
the Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 (the
"1988 Convention"). As India is also a party to the 1961 and the 1988
Conventions, India would be estopped from arguing in this dispute that narcotic
drugs do not pose a serious risk to human health or life for the purposes of
Article XX(b).
(ii) The Drug Arrangements are "necessary" to fight drug
production and trafficking
The "values" pursued by the Drug Arrangements
4.96 The Appellate Body held in Korea - Various Measures
on Beef that "the more vital or important the common interests or values
pursued, the easier it would be to accept as necessary the measures designed to
achieve those ends". As emphasized by the Appellate Body in EC - Asbestos,
the preservation of human life and health is "both vital and important in the
highest degree". Accordingly, in the present case the term "necessary" should be
interpreted by the Panel according to its broadest possible meaning.
Contribution of the Drug Arrangements to the protection
of human life and health
4.97 The Drug Arrangements contribute to the objective of
preserving the life and health of the European Communities' population against
the risks from the consumption of narcotic drugs by supporting the measures
taken by other countries against the illicit production and trafficking of those
substances, thereby reducing their supply to the European Communities.
4.98 There is a clear link between drug control and economic
development as recognized by the General Assembly of United Nations and the
INCB. The Drug Arrangements take account of that link. They seek to promote the
development of alternative economic activities to replace illicit drug
production and trafficking and, more generally, to raise the overall level of
economic development of the countries concerned, so as that they can generate
the resources and capacity required for enforcing an effective system of drug
control.
4.99 The Drug Arrangements are embedded in a strategy that
encompasses four different but related types of actions: (i) reducing the demand
of drugs, through prevention, treatment and rehabilitation; (ii) preventing drug
supply through law enforcement action; (iii) reducing illicit cultivation by
actions such as the promotion of alternative development; and (iv) promoting
international cooperation. Technical and financial assistance to the developing
countries affected by drug production or trafficking does not render the Drug
Arrangements unnecessary but rather the Drug Arrangements are a necessary
complement to such technical and financial assistance.
Trade impact of the Drug Arrangements
4.100 As required by paragraph 3(a) of the Enabling Clause,
the Drug Arrangements have been designed to promote trade from the beneficiary
countries and not to raise barriers to the trade of other countries. There is no
evidence that, in practice, the Drug Arrangements have displaced imports from
other developing countries to any significant extent. The trade preferences
granted under the Drug Arrangements are also subject to the general "graduation"
mechanism provided for in the GSP Regulation.
(c) The Drug Arrangements are applied consistently with
the chapeau
4.101 The chapeau of Article XX establishes three standards
regarding the application of measures for which justification under Article XX
may be sought. First, there must be no arbitrary discrimination between
countries where the same conditions prevail; second, there must be no
unjustifiable discrimination between countries where the same conditions
prevail; and third, there must be no disguised restriction on international
trade. These three standards, while distinct, must "be read side-by-side" and
"impart meaning to one another".
4.102 The standards embodied in the chapeau are different
from the standard used in determining whether a measure violates the substantive
rules of the GATT (in casu the Enabling Clause) as observed by the
Appellate Body in US - Shrimp. The standards embodied in the chapeau are
also different from the standard used in determining whether the measure is
provisionally justified under one of the particular exceptions listed in Article
XX. As emphasized by the Appellate Body in US - Gasoline, the chapeau is
not concerned with the measure for which justification is sought but instead
with the application of such measure. According to the Appellate Body,
the general structure and design of the measure and its declared policy
objective must be examined under the exception listed in Article XX and not
under the chapeau. In turn, when considering the chapeau, the treaty interpreter
must determine whether the application of a measure provisionally justified
under one of the exceptions listed in Article XX constitutes an abuse or misuse
of such provisional justification.
(i) Arbitrary or unjustifiable discrimination
4.103 In this case, India's allegations do not relate to the
"application" of the measure but it is the essential substantive feature of the
"structure and design" of the measure in dispute. Therefore, the alleged
discrimination between the two categories of developing countries is irrelevant
for the purposes of the chapeau. In any case, however, the designation of the
beneficiary countries of the Drug Arrangements is made according to objective,
non discriminatory criteria. An inclusion of least-developed countries and other
developing countries which are parties to the Cotonou Agreement or to bilateral
free-trade agreements with the European Communities would have been pointless
because they already benefit from duty-free access under these regimes. Equally,
developed countries are not included because the "prevailing conditions" in
developed countries are not the same as those prevailing in developing
countries. Procedural aspects of granting and withdrawal of the special
preferences are also non-discriminatory.
(ii) Disguised restriction
4.104 Any restriction on imports from developing countries
not especially affected by the drug problem which are an inherent effect of the
exclusion of that category of countries from the Drug Arrangements cannot be
relied upon in order to establish that the application of the Drug
Arrangements leads to a "disguised restriction" of trade. Instead, in order to
establish that the Drug Arrangements fail to comply with that standard, it would
have to be shown that imports from India are restricted because, as a matter of
application of the Drug Arrangements, India has been unduly excluded from
the list of beneficiaries of the Drug Arrangements even though it qualifies as a
country that is especially affected by the drug problem. However, the selection
of the beneficiaries of the Drug Arrangements has been made according to
objective, non-discriminatory criteria.
2 Request for Consultations by India, European Communities -
Conditions for the Granting of Tariff Preferences to Developing Countries,
12 December 2002 (WT/DS246/1).
3 Request for the Establishment of a Panel by India,
European Communities - Conditions for the Granting of Tariff Preferences to
Developing Countries, 9 December 2002 (WT/DS246/4).
4
WT/DS246/5, 6 March 2003, para. 2.
5 Ibid.
6 Ibid.
7 See Annex 1 to this Report.
8 [2001] OJ L346/1 (Exhibit India-6).
9 Additionally, covered products do not enjoy duty-free access
where they are subject to exceptions external to the Drug Arrangements, e.g.,
sector graduation under Article 12 of the Regulation and temporary withdrawal
under Article 26 of the Regulation.
10 First written submission of India, para. 67.
11 First written submission of India, para. 68.
12 First written submission of India, para. 70.
13 First written submission of the European Communities,
para.19.
14 First written submission of the European Communities, para.20
and 217; second oral statement of the European Communities, para.81.
15 Second oral statement of the European Communities, para.25.
16 First written submission of the European Communities, para.
217.
17 Second oral statement of the European Communities, para. 81.
18 [2001] OJ L346/1 (Exhibit India-6).
19 The New Shorter Oxford English Dictionary, 4 th
Edition, p. 3465.
20 Appellate Body Report, Canada - Autos, para. 76.
21 Panel Report, Canada - Autos, para. 10.23.
22 With the exception of like products from least-developed
countries covered under the Special Arrangements for least-developed countries.
Hereinafter (as regards First written submission of India), unless the context
otherwise requires, "all other Members" excludes least-developed country
Members.
23 The relevant ordinary meaning of "advantage" is "I. superior
position 1. The position, state, or circumstance of being ahead of another, or
having the better of him or her�2. A favouring circumstance; something which
gives one a better position" The New Shorter Oxford English Dictionary,
4th Edition, p. 31.
24 Introductory clause No. 17, Council Regulation (EC) No..
2820/1998 of 21 December 1998 applying a multiannual scheme of generalized
tariff preferences for the period 1 July 1999 to 31 December 2001 [1998] OJ
L367/1.
25 Request for a WTO Waiver - New EC Special Tariff Arrangements
to Combat Drug Production and Trafficking, 24 October 2001 (G/C/W/328) (Exhibit
India-2[a]) as revised on 23 November 2001 (G/C/W/328/Add. 1) (Exhibit
India-2[b]).
26 "Aide-Memoire of the Joint Andean Community-European
Commission Technical Evaluation Meeting on the Profitable Use of the Andean
GSP,21-22 November 2002"
<http://www.comunidadandina.org/ingles/common/europa_2.htm> (last accessed 6
March 2003) (Exhibit India-3).
27 Appellate Body Report, Canada - Autos, footnote 4,
para. 84.
28 Appellate Body Report, US - Wool Shirts and Blouses,
DSR 1997:1; 323, at 337; Appellate Body Report, US - FSC (Article 21.5 - EC),
para. 133.
29 Appellate Body Report, India - Patents (US), para. 45.
30 As used in Article 31.1 of the Vienna Convention on the Law
of Treaties.
31 United States Caribbean Basin Economic Recovery Act waiver
adopted 15 February 1985 (L/5579, BISD 31S/20) (renewed 15 November 1995
[WT/L/104]); Canada CARIBCAN waiver adopted 26 November 1986 (L/6102, SR42/4)
(renewed 14 October 1996 [WT/L/185]); United States Andean Trade Preference Act
waiver adopted 19 May 1992 (L/6991) (renewed 14 October 1996 [WT/L/183 and
WT/L/184]); European Communities Fourth ACP-EEC Convention of Lom� waiver
adopted 9 December 1994 (L/7604) (renewed 14 October 1996 [WT/L/186 and
WT/L/187]); European Communities - The ACP-EC Partnership Agreement waiver
adopted 14 November 2001 (WT/MIN [01]/15).
32 The New Shorter Oxford English Dictionary, 4th
Edition, p. 689.
33 The Spanish and French texts of footnote 3 likewise use the
definite article "the". The Spanish text provides: "Tal como lo define la
Decisi�n de las PARTES CONTRATANTES de 25 de junio de 1971, relativa al
establecimiento de un 'sistema generalizado de preferencias sin reciprocidad ni
discriminaci�n que redunde en beneficio de los pa�ses en desarrollo'" The
French text provides: "Tel qu'il est d�fini dans la d�cision des PARTIES
CONTRACTANTES en date du 25 juin 1971 concernant l'instauration d'un syst�me
g�n�ralis� de pr�f�rences, 'sans r�ciprocit� ni discrimination, qui serait
avantageux pour les pays en voie de d�veloppement'" (emphasis added).
34 First written submission of the European Communities, paras.
120-124.
35 UNDCP, World Drug Report, 2000, p. 160.; UNDCP,
Global Illicit Drug Trends 2002, p. 45 et seq. (figure in bracket
is based on the World Drug Report). The estimates for 2002 are found in
UNODC, The Opium Economy in Afghanistan, p. 30.
36 UNDCP, World Drug Report, 2000, p. 161; UNDCP,
Global Illicit Drug Trends 2002, p. 55 et seq. (figures in brackets
are based on the World Drug Report).
37 Figures for 1994 to 1998 are from UNDCP, World Drug Report,
2000, p. 167; figures for 1999 from UNDCP, Global Illicit Drug Trends,
2001, p. 94; and figures for 2000 from UNDCP, Global Illicit Drug Trends,
2002, p. 80.
38 Figures for 1994 to 1998 are from UNDCP, World Drug Report,
2000, p. 168; figures for 1999 from UNDCP, Global Illicit Drug Trends 2001,
p. 107; and figures for 2000 from UNDCP, Global Illicit Drug Trends,
2002, p. 94.
39 Figures for 1994 to 1998 from UNDCP, World Drug Report,
2000, p. 169; figures for 1999 and 2000 from UNDCP, Global Illicit Drug
Trends 2002, p. 119 et seq.
40 According to the statistics of the Organization of American
States, the figures for Peru are generally much higher. 1995: 29,147; 1996:
20,398; 1997: 11,111; 1998: 21,989; 1999: 32,846.
1994
1995
1996
1997
1998
1999
2000
Iran
117,095
126,554
149,577
162,414
154,454
204,485
179,053
Pakistan
14,663
109,420
7,423
7,300
5,022
16,320
8,867
(d) The figures of the main seizures of heroin are shown
as below:
1994
1995
1996
1997
1998
1999
2000
Iran
13,767
13,121
11,235
20,936
25,186
28,794
26,953
Pakistan
6,444
10,760
5,872
6,156
3,364
4,974
9,492
(e) The figures for the main cocaine seizures are:
1994
1995
1996
1997
1998
1999
2000
Colombia
69,592
59,030
45,779
42,044
107,480
63,945
110,428
Mexico
22,117
22,708
23,835
34,952
22,597
34,623
23,196
Panama
5,177
7,169
8,168
15,177
11,828
3,140
7,400
Bolivia
10,021
8,497
8,305
13,689
10,102
7,707
5,559
Peru 40
10,634
22,661
19,695
8,796
9,937
11,307
11,848
Guatemala
1,900
956
3,951
5,098
9,217
9,965
1,518
Venezuela
6,035
6,650
5,906
16,741
8,159
12,149
14,771
Costa Rica
1,411
1,170
1,873
7,857
7,387
1,999
5,781
Brazil
12,028
5,815
4,071
4,309
6,560
7,646
5,517
Nicaragua
1,338
1,507
398
2,790
4,750
833
961
Ecuador
1,790
4,284
9,534
3,697
3,854
10,162
3,308
El Salvador
No report
65
99
234
45
38
432
Honduras
930
408
3,275
2,187
4,750
833
1,215
1 GATT Document, L/4903, BISD 26S/203.
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