EC ASBESTOS CASE

EC ASBESTOS CASE[1]

By- Anjanee Goel

Complainant- Canada

Respondent- European Communities

GATT Articles III: 4, XX and XXXIII: 1(b)

It was a case regarding France’s ban on asbestos. The issue in this case was between imported asbestos and products containing asbestos versus certain domestic substitutes such as PVA, cellulose and glass (“PCG”) fibres and products containing such substitutes.

In this case, France prohibited the manufacture, processing, sale, and importation of asbestos fibers and products containing asbestos fibers, although it allowed the production and sale of asbestos substitutes. Therefore, the ban clearly benefited domestic producers of asbestos substitutes over their foreign asbestos-producing competitors. In the context of the discussion of “like” product, the Appellate Body said that health risks are to be considered in the Article III:4 “like product” inquiry.

In EC-Asbestos, the Appellate Body made it look as if the purpose of the regulatory measure was relevant to applying the “like product” tests, thus giving support to those who would read purpose into the analysis of Article III. However, the purpose of a measure has no role other than to help apply the competitive relationship test.

Regulatory purpose is not an independent reason for finding that products are not “like.” Instead, it is simply a fact that helps us understand the competitive relationship between imported and domestic goods. The Appellate Body integrated a consideration of health factors into two of the Border Tax Adjustments criteria: physical properties and consumers’ tastes and habits.

Thus, when determining which physical properties are relevant to the “like product” inquiry, “panels have got to inspect those physical properties of products that are probable to persuade the competitive affiliation between products in the market.

Since the Appellate Body established the Panel’s likeness scrutiny amongst asbestos and PCG fibres as well as amongst cement-based products comprising of asbestos and those having PCG fibres deficient, it rejected and reversed the Panel’s rulings that the products at question were alike and that the measure was incompatible with Article III: 4.

The Appellate Body upheld the Panel’s ruling that the ban was acceptable as an exemption under Article XX (b). The Panel also established that the steps taken fulfilled the conditions of the Article XX, i.e. chapeau, as the measure neither constituted a disguised restriction on international trade, nor led to arbitrary or unjustifiable discrimination.

The Panel after applying Article XXIII: 1(b) to the measure in question finally discarded Canada’s claim and ruled that the measure did not result in mutilation under Article XXIII: 1(b), due to Canada having rationale to expect a ban on asbestos.


[1] DS 135: European Communities — Measures Affecting Asbestos and Products Containing Asbestos


FAVOUR ONE, FAVOUR ALL- MFN UNDER GATT AND GATS

By- Anjanee Goel

Non-discrimination is a key rule of the multilateral trading framework and is perceived in the Preamble to of the WTO Agreement as a key instrument to accomplish the goals of the WTO. WTO nations communicate their aspiration to eradicate discriminatory management in international trade relations through the preamble. Non discrimination in the WTO is personified by two standards, namely, the most favoured nation (MFN) treatment and the national treatment obligation. A country grants the most favoured nation clause to a different country in case if it is keen in increasing trade with that nation.

Underneath the WTO agreements, nations cannot normally differentiate between their trading associates. If one nation awards any other nation a special favour, for instance, a inferior customs duty rate for one of their goods, then it will have to do the equivalent for all WTO nations.

MFN under GATT (article 1)

The universal consequence of Article I.1 is to construct the responsibility among WTO Members to provide each others’ like products the most excellent existing market access opportunities with no discrimination in fact or in law.

A detailed reading of the provision reveals that the key elements of the MFN principle are:

  1. Any advantage, favour of privilege covered in Article I.1.

In EC Bananas case, license allocation rules for imports, procedural as well as regulatory prerequisite were held to be advantages. In Canada-Autos Case, a wider Scope of the words ‘advantage’ and ‘product’ in clause were given.

  • Like products.

In Spanish Unroasted Coffee case, criteria to determine likeness of product were provided:

  • the characteristics of the products;
  • their end-use;
  • Tariff regime of other members; and
  • Consumers’ tastes and habits.
  • The immediate and unconditional grant of the advantage at issue to the like products concerned.

In Indonesia Autos Case, tax benefits and custom duties were held to be restrictive on achieving a certain local content value for the completed car.

Exceptions (GATT)

  1. General Exceptions

Article XX of GATT 1994 perceives that legislatures may need to apply and implement measures for purposes, for example, the insurance of public ethics; human animal or plant life and wellbeing; and the protection of nationwide treasures.

In Shrimp and turtle case the appellant party stated that Article XX (b) and (g) were implied only to forestall maltreatment of environmental protection laws to weaken the multilateral trading framework. Measures which were taken by the US qualified for temporary justification under this article yet failed to meet the essentials of the Chapeau.

  • Security exceptions

GATT Article XXI expresses that a WTO Member is permitted to take any action which it finds vital for the protection of its fundamental security interests or in execution of its responsibilities under the United Nations Charter for the preservation of universal harmony and security.

  • Balance of payment exceptions
  • Regional Integration (GATT article XXIV) through custom associations or free trade territories liberalizes trade amongst nations within the regional areas, while keeping up the trade barriers with nations outside the region or districts.
  • S&D for developing countries- Part 4 of the GATT incorporates articles on the idea of non-reciprocity in trade negotiations among developed and budding nations, that is, when developed countries award trade concessions to budding nations they ought not to anticipate the developing countries to make coordinating proposals in consequently.
  • GATT guidelines on safeguards are in Article XIX and XII. Article XII of the GATT Agreement accommodates the introduction of provisional limitations to protect the balance-of-payments.

MFN under GATS (article 2)

Under GATS, if a nation permits foreign competition in a segment, equivalent opportunities in that sector ought to be provided to service providing organizations from all other WTO nations. This is applicable regardless of whether the nation has made no particular commitment to provide foreign organizations access to its markets underneath the WTO.

MFN is applicable on all services; however some special provisional exceptions have been permitted. When GATS came into enforcement, various nations already had privileged agreements in services that they had marked with trading associations. WTO members felt it was important to keep up with these preferences briefly. They gave themselves the option to keep giving increasingly favorable treatment to specific nations in particular services by listing “MFN exceptions” alongside their first sets of responsibilities.

Exceptions (GATS)

Aside from some universally applicable exemption clauses there are basically three instruments that take into consideration exceptions from, or provide overrides over, the MFN obligation in services buying-selling:

  1. Economic Integration Agreements (EIAs) in accordance with Articles V and V bis of the GATS;
  2. Recognition measures identified with standards, certificates etc.  under  Article VII; and
  3. Exceptions under MFN treatment as accessible under Article II: 2 and the related Annex. 

Conclusion

  1. Reduces transaction costs
  2. Promotes additional reciprocal liberalization
  3. Increased effectiveness in the world economy
  4. Stabilization of the Multilateral Trading framework
  5. Reduction of the expense of maintaining the Multilateral Trading framework

ANTI DUMPING MEASURES UNDER GATT, 1994

By- Anjanee Goel

The law of World Trade Organization (WTO) doesn’t forbid dumping. In reality, since costs of products are normally decided by private organizations, ‘dumping’ all by itself is not controlled by WTO law. 

‘Dumping’ is the bringing of a product onto the market of another nation (or customs region) at a cost not same but less than the typical value of that product.  Any item can be considered ‘dumped’ where the export cost of that product is less than its typical price, that is, the similar cost in the normal course of buying-selling for the ‘like product’ bound for consumption in the exporting nation. 

Nonetheless, Dumping is to be ‘denounced’ if it becomes the cause of injury to the domestic business of the importing nation. The embodiment of the WTO principles on dumping is that Members are permitted to take certain measures, which are in any case WTO-conflicting, to ensure protection to their domestic industry from the adverse impacts of dumping. 

Article VI of the GATT 1994 describes, in significant part, that: The members perceive that dumping is to be denounced provided it causes or compromises material injury to a built up industry in the region of a member or significantly hinders the foundation of a domestic industry. While attempting to cure dumping, anti-dumping agreement further expounds on the substantive and procedural laws to be followed.

Normally alluded to as the Anti-Dumping Agreement, the dumping and anti-dumping measures by law of WTO are set in GATT 1994- Article VI and in the WTO Agreement on Implementation of Article VI.

In the case of US-Hot-rolled Steel, it was held that Article 2.6 of the Anti-Dumping Agreement characterizes the ‘like product’ as a product which is indistinguishable, i.e. comparable in all regards to the product viable, or in the nonexistence of such a product, a different item which, even though not alike in all aspects, has qualities intently resembling those of the product under deliberation.

For ascertaining normal cost, Article 2.1 of the Anti-Dumping Agreement characterizes the ‘normal value’ of an item as: “…the equivalent cost, in the normal course of buying-selling, for the like product when bound for utilization in the exporting nation”.

The skillful authorities must build up the existence, or danger, of injury to the domestic industry; and the casual connection between the dumping and the injury for the purpose of determining injury.  Article 3.1 of the Agreement on anti-dumping necessitates that a injury determination to the domestic manufacturing business be founded on positive proof and include an objective assessment of both: (a) the quantity of imports dumped and the impact of the imports dumped on costs in the domestic marketplace for like items; and (b) the subsequent effect of these imports on domestic makers of such items.

Levying of anti-dumping measures is made simply after an examination started and directed as per the Agreement based on prior legislation that has been appropriately notified to the WTO, an assurance is made that there is dumping; the domestic industry creating the like product in the importing nation is experiencing injury; and there is a causal connection between the dumping and the injury.

It is not obligatory for a WTO member country to institute anti- dumping legislation, though if the a Member government settles on the policy decision to have the choice of commanding anti-dumping measures, Article 1 of the Anti-Dumping Agreement oversees such measures and indicates that an anti-dumping measure will be made applicable distinctly under the situations provided in accordance with Article VI of GATT 1994 and as per examinations started and led in accordance with the articles of this Agreement.

Article 7 of the Agreement may appear as a provisional obligation or, ideally, a security, by money deposit or bond, equivalent to the amount of the preliminarily decided margin of dumping.  There must be a preliminary agreed determination of dumping, causation and injury.  The examining authorities must decide that such a measure is important to forestall injury being caused at some point in the investigation. It cannot be applied sooner than sixty days following the inception of the examination.

Application will be limited to brief periods not surpassing 4 months on verdict of the authorities concerned, upon demand by exporters on behalf of a considerable percentage of the trade in question, to a period not surpassing six months.

Article 18.1 of the Anti-Dumping Agreement states that no particular action against dumping of exports from another member can be taken aside from the provisions of GATT, 1994 and it efficiently limits anti-dumping measures to conclusive anti-dumping duties; temporary measures; and cost undertakings.

Article 11 of the Anti-Dumping Agreement sets up rules overseeing the duration of anti-dumping measures and provides for a pre-requisite for the occasional review of any continuing need for the imposition of anti-dumping measures.  An anti-dumping duty will stay in force just as long as and to the degree of extend important to balance dumping that is the cause of injury.


FACILITIES ADMISSIBLE UNDER INTERSTATE MIGRANT’S WORKMEN ACT, 1979

By- Diksha Gupta

Section 15 of the Act states the Journey allowance payable to the migrant worker. A remittance of at least the cost from the residence of the labourer in his State to the workplace in the other State must be paid by the contractor, both for the outward and return passages and alongside this the workman is considered to be at work even though he is in such journeys, he is entitled for the payment of wages for the said period.

Section 14 states that the displacement allowance has to be paid to every migrant by the contractor at the time of recruitment. An allowance equal to 50% of the monthly wages or Rs. 75, whichever is higher, has to be paid. This amount is non-refundable and is paid in addition to the wages payable to him.

Section 13 accommodates the wage rates and conditions of services of inter-State migrant workmen. It states as follows:

(1) The holiday hours of work, pay rates and other conditions of service of an inter-State migrant workman shall,

(a) be same to that of any other worker in the establishment performing similar nature of duties as that of the migrant worker.

b) or as the case may be, prescribed by the appropriate Government:

It is further stated that every migrant worker has to be paid at least the wages fixed under the Minimum Wages Act, 1948.

(2) The wages payable under this section has to be paid in cash.

Section 16 provides some other facilities that are provided to the migrant workers. It states that it is the obligation of a contractor, who is employing inter-State migrant workman for work,

(a) To look after regular imbursement of wages to such labourers;

(b) To protect equivalent pay for equal work regardless of gender;

(c) to safeguard proper working conditions to such workmen taking into consideration the fact that the workman is required to work in a State different from their own State;

(d) To provide suitable residential place to such workmen in the course of their employment.

(e) To make available the prescribed health check facilities to the workers, free of cost;

(f) To provide such shielding clothing to the employees as may be prescribed; and

(g) In case of any lethal mishap or serious bodily injury to any such labourer, to report to the predefined authorities of both the States and furthermore the closest relative of the workman.

SHRIMP-TURTLE CASE

SHRIMP-TURTLE CASE[1]

By- Gruleen Kaur

The Shrimp-Turtle case is an important contribution to the debate on environment and the trade and also involves trade measures that are quite similar to that of employed in the case of Tuna Dolphin. In this case, the US had imposed ban against all the countries that do not enforce restrictions on the use of fishing methods which directly and adversely affects the lives of the turtles.

The case was presented before WTO Appellate Body which gave a very different reasoning if compared to Tuna Dolphin case and expressed great sympathy for the goal of environmental protection. The sine qua non of the case are:-

  • This case fully completes the reformed interpretation of GATT Article XX (g), which the Appellate body had introduced in the United States- Standards for Reformulated and Conventional Gasoline case.
  • The body further contended the trade measures into three elements:-
  • Concerns exhaustible natural resources;
  • Conservation related to those exhaustible natural resources;
  • Is made in consonance with the restrictions on domestic production or the exhaustible consumption natural resources.

[1] DS58: United States — Import Prohibition of Certain Shrimp and Shrimp Products


MERGERS AND ACQUISITIONS IN TECH, MEDIA AND TELECOM

By- Anjanee Goel and Mridul Jhalani

Introduction

As the swiftness of technological rejuvenation quickens, mergers and acquisitions can provide a fast track for accelerating product roadmaps, gaining entrance to new technologies and markets, and fending off competitors from both inside and outside one’s industry. 

This strategy is especially evident in the technology, media, and telecommunications (TMT) sector which in 2017 recorded an all-time high of 3,389 M&A transactions globally, worth a total of $498.2 billion[1].

A considerable majority of U.S. corporate and private-equity executives (68 percent and 76 percent, respectively) look forward to an uptick in the number of transactions across all industries in 2018. Over the past period of two years, 65 percent of corporate respondents said their cash funds have increased, and the primary projected use of that cash is M&A deals[2].

Mergers And Acquisitions In Tech

We live in scenario where everything and anything can be done by machines. As every kind of person has different ideas, we need to combine great ideas to get the best. This is why mergers and acquisition are important aspect for growth and profit. Mergers and Acquisition in global 2019 has increased to 164 billion in 2019 from dollar 88 billion in 2006.

Especially centers around the issue of how little and medium-sized ventures (SMEs) recognize and obtain new innovation from colleges. The exploration involves an investigation of the issue as far as the social relations among colleges and SMEs, and an endeavor to assemble and build up the possibility of an innovation bank internet webpage for use by SMEs.

Utilizing ideas from late work in social investigations of science and innovation, it is contended that a vital component to tending to the issue is to comprehend SMEs as configured clients both of government and approach activities, and of mechanical advancement.[3]

Strategic drivers for M& A in technology sector

In technology sector mergers & Acquisitions have become a strategic tool for companies to acquire new technology in order to survive in this competitive market. In IT sector it is M&A of knowledge than companies or brands, new startups or small companies have great ideas and lack of market demand, so for growth or increase in market share M&A took place as well as in IT sector customer seeks to get everything in one shop, very prominent example to it is acquisition by HP of electronic data systems for $13.9 billion.

Mergers & Acquisition in technology is mostly like horizontal merger. One of the most prominent bidder in technological M&A is oracle corporation which is a software company based in California, United states. Oracle seeks to strengthen its product offering, build good market base, meet customer demand and expand partner opportunities. Today we are able to get food at our home on clicks, we can talk to person on video chats, and this list goes on. This is because of technology and its growth by mergers & Acquisition.

Merger of Flipkart & Walmart

Arrangements including the obtaining of online retailer Flipkart by American shopping mammoth Walmart made this the greatest year for mergers and acquisitions including Indian organizations on record.

The all out estimation of exchanges was $125.2 billion, as indicated by information aggregated by market-tracker Thomson Reuters Deals Intelligence. Information is as of December 14. This is about double the $63.2 billion found in the earlier year. The retail fragment which included Flipkart was third with arrangements worth $18.3 billion.

Acquisition of Motorola mobility by Google

On acquisition of Motorola mobility by Google, acquired more than 20,000 mobile patent. Google acquired it in 2011.

Mergers And Acquisitions In Media

The media segment has witnessed merger influence during the past two decades in reaction to deregulation and technological development. The Entertainment and Media (E&M) industry is witnessing an evolution to mobile access and content contributions in the midst of a digital surroundings.

The altering nature of the industry, with a deliberate shift toward digital media, well-built corporate cash reserves and creation of private equity firms, has acted as the key catalyst for deal activity in the media sector.

The M&A wave in the E&M sector resulted from old media companies seeking to reinvent themselves in order to exploit the growing market for online media. The previous trend had been for diversified media.

Another factor for the increased M&A activity in the sector was the keen interest of cash-rich private equity firms in the steady cash flow generated by media companies. A major change for the E&M sector is that on account of M&A activity, the lines separating marketing service providers, content providers, technology companies and media companies are becoming increasingly blurred.

The biggest deals in the media sector during the past two decades include Time merging with Warner, buying Turner Broadcasting, and then selling itself to America Online; Disney buying ABC; Viacom buying CBS; and Vivendi buying Universal. Other major deals were the union of Comcast and AT&T Broadband, EchoStar and DirecTV, Vivendi Universal and USA Networks[4].

One of the catalysts has been speedy technological developments. The propagation of high velocity broadband and smart devices as well as the coming out of dual screen media utilization and ‘cord-cutting’ have all helped to make deal making as companies try to get to grips with a new industry model. The way community consumes media has evolved extraordinarily, and the challenge for traditional media companies is to discover ways to compete[5].

The Time/ Warner merger[6]

Time Warner, Inc. is a global leader in media and entertainment, with business in television networks, filmed entertainment and publishing. The main divisions of Time Warner are Turner Broadcasting System, Warner Bros., Home Box Office and Time, Inc.

Warner Bros. Entertainment is a fully integrated; broad- based Entertainment Company with businesses ranging from feature film, TV and home entertainment production and worldwide distribution to home video, digital distribution, animation, comic books, licensing and international cinemas and broadcasting.

In 1989, Time, Inc. and Warner Communication merged to create a world power in the field of media and entertainment. The merger created the largest media and entertainment conglomerate in the World. Time is a most important and leading book and magazine publisher with widespread cable television holdings.

The merger made Time Warner one of the few global media giants that were able to create and distribute information in virtually any medium. The merger positioned Time Warner to compete against major European and Asian companies. The merger entity had a stock market value of $15.2 billion and revenue of $10 billion.

The latest unit possessed the majority productive recorded music and magazine publishing business in the US and the prevalent television programming operation mutually for pay cable and prime-time network television.

The merger was also significant as it underscored the network companies’ vulnerability to competition. The merger facilitated Time Warner’s ability to create television programming, distribute it over its own cable system and syndicate it around the world.

Analysts believed that the size of the new entity would enable it to fend off unwelcome takeover bids.

AT&T and Time Warner merger case[7]

AT&T originally announced strategy to merge with entertainment company Time Warner back in 2016. The $85 billion deal solicited strong words from then-presidential candidate Donald Trump, who claimed the merger would put “too much concentration of power in the hands of too few.”

After Donald Trump was elected U.S. President, his Justice Department filed a lawsuit in opposition to AT&T and Time Warner to obstruct the proposed merger.

The lawsuit in March & appeal in December brought further by the DOJ mark the first time in numerous decades that the U.S. government has intervened in a merger. But a flourishing merger would indicate that one of the world’s leading wireless and telecommunications companies would merge with one of the world’s largest media and entertainment companies.

If AT&T’s attainment of Time Warner was to go through, the telecommunications would be able to market Time Warner’s massive pool of content to other cable companies and consumers. It would also aspire to collect usage data concerning viewership of the content, with the definitive goal being able to construct a digital advertising arm to compete with major competitors like Facebook and Google.

In addition to the major business implications of the AT&T-Time Warner merger, the antitrust lawsuit will have much broader inference for the world of mergers and acquisitions (M&As) in general. Undeniably, the case would be a trend for future mergers and acquisition deals.

Merger And Acquisition In Telecom

Telecom Sector is one of the most profitable and rapidly developing industries in the world. After China the Indian telecom sector has become second largest telephone network in the world and had seen phenomenal growth and profit during the past few years.

In India, mergers and acquisitions have increased to a prominent level from the mid-1990s. In the United States, the mergers and acquisitions in the telecom sector are going on in a full-fledged manner.

Merger and acquisition in the Telecom Sector are most likely to be a horizontal merger the reason is the two entities who involved in merger are operating in the same industry, and also on the same product lines.

From the last few years, In Telecommunication industry vertical mergers are popular and attractive because telecom vendors are trying to merge with telecom operators, especially at the operational level. In acquisition, most of the time one company buys controlling stock of another company. In Ghana Telecom and Vodafone’s deal there is purely acquisition by the Vodafone.[8]

After getting the tag of world second largest telecommunication industry, India has getting attention of many big foreign players in telecom sector. And with the huge expectation of growth and profit many foreign companies in telecom sectors wanted to enter in India. But due to spectrum limitation and other entry barriers they prefer to used merger and acquisition to expand their footprints in India.

Telecommunication sector has seen rapid changes in the technology in past few recent years like 2G, 3G, and 4G. So, for being in this competitive market firms are going for M&A. smaller firms are the most insecure player in this market and for their future existence in the market they easily give their approval for merge with bigger firms because brand name plays an important role in this competitive telecommunication sector and they knows that they will be in benefit by merging with bigger company.

Attraction and demand has been picking up in Indian telecom sector as the Indian government has eased the rules and regulation regarding inter-circle and intra-circle mergers. This has led to a slew of M&A in the recent past within the domestic players as well as acquisitions by international players in the domestic market.

India’s rising integration with the global economy has led to a spurt in M&A in the telecom sector. It’s a win-a-win situation for international and Indian telecom companies as it gives foreign firms a chance to expand their footprint in South Asia and at the same time, capital scarce Indian telecom companies get the much-needed finances for expansion.

Liberalization in India’s telecommunication industry was noticed when global investor came in India in 1995 with the permission of government. They came into India through joint venture route. Some of these global companies included Vodafone, telecom Malaysia, AT&T, Hutchison Whampoa and Telstra Australia.

In telecommunication sector merger and acquisition gave some negative effects, which include Monopolization of the telecom product and services, unemployment and others. However, various countries government is taking appropriate step to control these problems.

Vodafone- Hutchison Essar Merger in 2007

In 2007, Vodafone who is the world’s biggest telecom company in terms of revenue, made a major entry into the Indian telecommunication industry by acquiring a 52 percent stake in Hutchison Essar Ltd (Hutchison Essar), an Indian telecom company because, in 2007, India was most lucrative market for world telecom companies.

Vodafone had faced many problems for taking the deal – Firstly opposition by the HTIL, Essar Ltd, aggressive bidding by the other telecom operators and the regulators who took their time for approval of deal.

But finally Vodafone clinch the deal and outbidding the other telecom competitors. Some critics felt that the merger of Vodafone, Hutchison Essar was overpaid. But Vodafone board contended that they acquire a company in the most competitive telecommunication markets in the world so it was worth to pay for this deal.[9]


[1]https://www2.deloitte.com/content/dam/Deloitte/us/Documents/technology-media-telecommunications/us-mergers-acquisitions-tech-media-telecom.pdf.

[2] Ibid.

[3] James, Andrew D., Luke Georghiou, and J. Stanley Metcalfe. “Integrating technology into merger and acquisition decision making.” Technovation 18.8-9 (1998): 563-591.

[4] Kumar B.R. (2012) Mergers and Acquisitions in the Entertainment and Media Sector. In: Mega Mergers and Acquisitions. Palgrave Macmillan, London.

[5] https://www.financierworldwide.com/ma-in-the-media-sector#.XKYWfZgzbIU.

[6] https://doi.org/10.1057/9781137005908_4.

[7] https://www.investopedia.com/investing/att-and-time-warner-merger-case-what-you-need-know/.

[8]Godfred Yaw Koi-Akrofi, Motives for Telecom Mergers and Acquisitions, (Dec. 4 2014), http://www.ijias.issr-journals.org/.

[9] ICMR, The Hutchison Essar Acquisition: Vodafone’s Foray into an Emerging Market, 2008.


IMPORT LICENSING PROCEDURES IN INDIA

By- Diksha Gupta

GATT Article VIII (entitled Fees and Formalities connected with Importation and Exportation) deals with import licensing procedures in a non-specific manner.
GATT Article X mandates the members to issue and administer the regulations, laws, judicial decisions, and administrative rulings of general application, including those relating to the requirements on imports or exports in an even, fair, and reasonable manner.

Import licensing is a regulatory procedure that expresses that so as to import products one needs to present an application or other documents, aside from those required for customs purposes, to the significant administrative body.

On 1 January 1980, it was entered into force with an objective to prevent import licensing procedures from unreasonable hampering in international trade. Only those countries which had signed and ratified it are indebted under this agreement. The Agreement was revised during Uruguay Round to strengthen the disciplines on transparency & notifications and was binding on all the WTO members & was entered into force on 1 January 1995.

The Tokyo Round Import Licensing Code covers non-tariff measures that were concluded during the multilateral trade negotiations (1973-1979).

Import Licensing is categorised as follows:

  1. Automatic import licensing
  2. Non-automatic import licensing

The main objectives of the Agreement are to-

  1. Avert systems applied for yielding import licenses for having in themselves, prohibitive or distortive consequences on imports.
  2. Ease out and bring transparency to import licensing procedures,
  3. confirm their fair and equitable application and administration,

Automatic import licensing

Article 2.1 characterizes Automatic import licensing as import licensing where the authorization of the application is permitted in all cases.

Article 2.2 (a) states that Licence applications ought to be approved promptly or within 10 working days on the receipt of use.  

Automatic import licensing is important in cases where no other appropriate procedure is available.

Article 2.2 (b) states that as soon as the circumstances which have given rise to it stop prevailing, they have to be removed.

Conditions:

  1. Any individual who satisfies the legitimate requirements is equally qualified to apply for and acquire import licenses.
  2. Automatic licensing procedures are to be administered in a manner so that they don’t have any restrictive effects on imports.
  3. No discrimination among those who apply for automatic licenses.

Committee on Import Licensing   

A Committee on Import Licensing which is open to all Members has been established under Article 4 which meets to consult on matters relating to the operation of the Agreement or the persistence of its objectives.

Non-automatic import licensing

It administers trade restrictions that are justified within the WTO legal framework. Article 3.1 defines Non-automatic import licensing as a license which do not fall in the category of automatic import licensing

TUNA-DOLPHIN CASE

TUNA-DOLPHIN CASE[1]

By- Gruleen Kaur

This is a very important and attracts lot of attention as it includes provisions explained under Article XX of GATT which stipulates the General Exceptions and the implications for environmental disputes. However, this case does not have any status of legal interpretation of GATT law as the panel report was circulated in 1991, but was not adopted. Thus, the same was settled out of the court.

The United States’ Marine Mammal Protection Act (MMPA) imposes a ban on imports of tuna from countries that did not have a conservation program designed to protect dolphins in the tuna-fishing process. The facts of the case states that in eastern tropical areas of the Pacific Ocean, schools of yellow fin tuna swim beneath schools of dolphins. When tuna is harvested with the help of purse seine nets, dolphins are trapped in the nets which results in their death. So, US had imposed ban on Mexican Tuna imports. The important questions arose were:-

  1. Can one country tell another as to what its environmental regulations should be?
  2. Do trade rules permit action to be taken against the method used in the production of goods?
  3. Mexico contended that the ban is inconsistent with Articles III, XI & XIII and is also violating the objective of its Preamble (Chapeau).

The dispute resolution panel decided the case and contended that US could not justify the ban on Mexican Tuna. They have applied reasonability test and trade restrictive measures to justify their decision and the reasons for the same are as follows:-

  • The US could not use the Article XX exceptions to regulate natural resources outside of its borders.
  • The US could not prove that it was least trade-trade restrictive way to protect dolphins; neither had it initiated dolphin- protection agreements with other countries.
  • It was said that an agreement must not be inconsistent with the Preamble of the Act, i.e., Chapeau.
  • The Panel found that neither the primary nor the intermediary nation embargo was covered under Article III, that both were contrary to Article XI.
  • The panel gave priority to free trade over environmental protection in consonance with the provisions of Article XX(b), (g) or (d) of the GATT.

[1] DS381: United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products


AN INTRODUCTION TO EXIM POLICY IN INDIA

By- Adhish Chandra Saxena and Diksha Gupta

The Export-Import Policy (EXIM Policy), reported under the Foreign Trade (Development and Regulation Act), 1992, would mirror the degree of controls or advancement of outside exchange and show the measures for send out advancement. In spite of the fact that the EXIM Policy is reported for a five-year time frame, declaring a Policy on March 31st of consistently, inside the wide casing of the 5 Year Policy, for the ensuring year. A critical element of the EXIM policy since 1992 is freedom. Licensing, quantitative limitations and other administrative and optional controls have been generously disposed of.

The Union Commerce Ministry, Government of India reports the incorporated Foreign Trade Policy FTP in every 5 year. This is likewise called EXIM policy. This policy is refreshed each year with a few adjustments and new plans. New plans become effective on the first day of financial year, i.e., April 1, consistently. The Foreign Trade Policy which was reported on August 28, 2009 is a coordinated policy for the period 2009-14.

Export Import (EXIM) Policy outlines tenets and directions for fares and imports of a nation. This policy is further called as Foreign Trade Policy. It gives policy and procedure of the administration to be taken after for advancing exports and managing imports. This approach is occasionally evaluated to consolidate important changes according to changing residential and global condition. In this arrangement, approach of government towards different kinds of exports and imports is passed on to various exporters and importers.

Features

  • Two new plans in particular ” Merchandise Exports from India Scheme (MEIS)” and “Service Exports from India Scheme (SEIS)” has been presented supplanting numerous plans existing prior.
  • MEIS to advance export of informed products to specified markets and SEIS for advantage of all exporters in India.
  • Reduce export trade commitments by 25% and offer lift to domestic manufacturers supporting the “Make in India” idea.
  • Both MEIS and SEIS firm will get subtilized office spaces in SEZs, alongside different advantages.
  • As a step towards Digital India idea, online method to upload digitally marked record by CA/CS/Cost Accountant are produced and advance portable application for documenting charge, stamp obligation has been created.
  • Benefits of MEIS would be qualified for e-business of crafted works, handlooms, books and so on. Exports up to 25000 for every dispatch will get SEIS advantage.
  • Duty Credit scrips to be openly transferable and usable for instalments of custom duty, excise duty and service tax.
  • Recognition of status holder has been changed from Rupees to US Dollars procuring. The position status holder will perceive and reward those business people who caused in India to become a noteworthy export player.
  • Manufacturers who are additionally status holders will be empower to self-ensure their fabricated merchandise as originating from India.
  • Repeatedly submission of physical duplicates of archives accessible on Exporter Importer Profile isn’t required.
  • Agricultural and village industry items to be upheld over the globe at rates of 3% and 5% under MEIS.
  • Export obligation period for send out things identified with defence, military store, aviation and nuclear energy to be two years. Authentication of autonomous Chartered Engineer for recovery of EPGG approval is nolonger required.

Goals of EXIM Policy

  1. To encourage maintained development in export to achieve an offer of atleast 1 % of worldwide stock trade.
  2. To empower supported financial development by giving access to fundamental raw materials, intermediates, parts, consumables and capital merchandise required for expanding creation and giving administrations.
  3. To upgrade the innovative quality and effectiveness of Indian agribusiness, industry and service, in this way enhancing their focused quality while producing new business openings, and to support the fulfilment of globally acknowledged standards of value.
  4. To give purchasers great quality products and enterprises at globally competitive costs while in the meantime making a level playing field for the household create.

Exports alludes to selling merchandise and services to different nations, while import implies purchasing products and services from different nations. Presently in the period of globalization, no economy on the planet can stay cut-off from rest of the world. Export and import assume a noteworthy part in the financial advancement of all the developed and developing economies. With the development of worldwide associations like WTO, UNCTAD, ASEAN, and so on., world exchange is developing at a quick rate.

Impact on the Economy

The EXIM policy “2015-2020” has anticipated that would twofold the share of India in world exchange from present level of 3%by the year 2020. Improving the current different plans, the new arrangement has come up with two schemes MEIS and SEIS that decreases the complexities and empower the new entrants. Additionally, utilization of technologyperforms the compliance reduces the transaction cost and manual errors.

This policy has additionally centered moving far from dependence on subsidies. By expanding benefits under EPCG on household acquirement and offering them more items under MEIS, the policy additionally looks to impetus the fares. Generation of new work and giving quality items at sensible cost to buyers are required to be conveyed by the policy.