International Trade and WTO Prof. Sohn, Taewoo

4. GATT/WTO The Third Pillar: National Treatment and GATT Article III (5) Q: Report of the Appellate Body, Korea-Taxes on Alcoholic Bererages (WT/DS75/AB/R, WT/DS84/AB/R) 1999 Q: Suppose that under its Liquor Tax Law, Korea imposes an ad valorem tax on imported distilled alcoholic beverages (e.g., brandy, cognac, gin, liqueurs, rum, tequila, vodka, and whiskey) in a dissimilar manner from the way it taxes a domestic alcoholic beverage, soju (a traditional Korean drink). Specifically, the tax burden is lower on soju than on the imports. Assume a WTO panel sides with the complainants, the EU and United States. Korea decides to appeal, and the key issue on appeal was whether the Korean liquor tax was consistent with the second sentence of GATT Article III:2. Suppose Korea points out that at some level, all products can be said to be competitive. It states that if an unqualified minimum threshold were enough to render products “directly competitive or substitutable products,” then Article III:2 would become an “unbridled instrument of tax harmonization and deregulation.” Accordingly, on appeal the question boils down to whether imported products are “directly” competitive or substitutable with the domestic product under consideration. The panel answered “yes,” i.e., the panel found that imported alcoholic beverages and soju were like or directly competitive. But, argues Korea, in doing so the panel committed four grave errors.

4. GATT/WTO The Third Pillar: National Treatment and GATT Article III (5) Q: Report of the Appellate Body, Korea-Taxes on Alcoholic Bererages (WT/DS75/AB/R, WT/DS84/AB/R) Q: The panel based its conclusion in part on the potential for competition between these products in the near future, not on an extant competitive relations. The panel speculated about what consumers might do, and did not focus on what they actually do. (2) The panel examined the “nature” of competition, thereby adding a “vague and subjective criterion” to the determination of whether products are directly competitive or substitutable. (3) The panel also checked evidence from other markets (e.g., Japan), thereby assuming without foundation that the Korean market was becoming like the other markets. (4) By grouping products in a Procrustean manner, the panel improperly defined the comparison to be made. For example, the panel grouped distilled soju and diluted soju together, and then compared them with all imported distilled spirits, which the panel had wrongly lumped together. Yet, not all of the constituents of each grouping were alike. Certain beverages that the panel had put in the same group for comparative purposes were not physically identical, were produced in different ways by different manufacturers using different materials, had different tastes, were used differently, and were marketed and sold in different ways through distinct distribution channels at very different prices subject to different tax rates. Consequently, the panel “ ‘trivialized’ actual consumer perceptions which are at the heart of the ‘directly competitive or substitutable standard.” What the panel should have done is juxtapose each individual imported drink with each domestic drink, i.e., engage in a product-by-product comparison. You are counsel to the EU or United States. How do you rebut Korea’s arguments? How do you anticipate the Appellate Body will rule?

4. GATT/WTO The Third Pillar: National Treatment and GATT Article III (5) Q: Report of the Appellate Body, Korea-Taxes on Alcoholic Bererages (WT/DS75/AB/R, WT/DS84/AB/R) A: In the actual Korea — Alcoholic Beverages case, a WTO panel ruled soju was directly competitive or substitutable with these imported products. It said Korea violated GATT Article III:2, because the tax differential was more than de minimis, and was applied so as to afford protection to domestic production. The key issue on appeal was whether the Korean liquor tax was consistent with the second sentence of GATT Article III:2. The Appellate Body upheld all of the panel’s findings, and in so doing put into action its like product analysis from Japan — Alcoholic Beverages. On appeal, the complainants, the European Communities (EC) and United States, disputed Korea’s points. The EC pointed out Korea wrongly assumed the phrase “directly competitive or substitutable” had to be interpreted strictly. In fact, the phrase is designed to connote a broad notion that would include potential competition and evidence from other markets. To be sure, said the EC, the panel had found an existing, direct competition relationship between soju and imported spirits. Still, the panel was right to examine potential competition, which is an important factor that the drafters of GATT did not exclude from consideration because they did not limit Article III:2 or Ad Article III with the word “actual.” Indeed, the EC argued potential competition is competition. As to the grouping of products, the EC challenged Korea to show that its suggested product-by-product algorithm would lead to a different legal conclusion. The implication was that grouping products was a reasonable and convenient methodology for analytical purposes only with no effect on the outcome.

Annex I: Notes and Supplementary Provisions Ad Article III           Any internal tax or other internal charge, or any law, regulation or requirement of the kind referred to in paragraph 1 which applies to an imported product and to the like domestic product and is collected or enforced in the case of the imported product at the time or point of importation, is nevertheless to be regarded as an internal tax or other internal charge, or a law, regulation or requirement of the kind referred to in paragraph 1, and is accordingly subject to the provisions of Article III. GATT 제3조 내국 과세 및 규정에 관한 내국민대우 1. 체약당사자들은 내국세 및 그밖의 내국과징금과 상품의 국내판매, 판매를 위한 제공, 구매, 운송, 유통 또는 사용에 영향을 주는 법률·규정·요건과 특정 수량 또는 비율로 상품을 혼합하거나 가공 또는 사용하도록 요구하는 내국의 수량적 규정이 국내생산을 보호하기 위하여 수입상품 또는 국내상품에 적용되어서는 아니된다는 것을 인정한다. 2. 다른 체약당사자의 영토내로 수입되는 체약당사자 영토의 상품은 동종의 국내상품에 직접적 또는 간접적으로 적용되는 내국세 또는 그밖의 모든 종류의 내국과징금을 초과하는 내국세 또는 그밖의 모든 종류의 내국과징금의 부과대상이 직접적으로든 간접적으로든 되지 아니한다. 또한, 어떠한 체약당사자도 제1항에 명시된 원칙에 반하는 방식으로 수입 또는 국내 상품에 내국세 또는 그밖의 내국과징금을 달리 적용하지 아니한다

4. GATT/WTO The Third Pillar: National Treatment and GATT Article III (5) Q: Report of the Appellate Body, Korea-Taxes on Alcoholic Bererages (WT/DS75/AB/R, WT/DS84/AB/R) A: The American response to Korea’s points mirrored that of the EC. The key difference between the EC and United States was the mode of argumentation: the United States expressly cited Japan — Alcoholic Beverages for support. The Appellate Body accepted the arguments of the EC and the United States, and upheld the panel’s work in all respects. It quoted from and cited generously to Japan — Alcoholic Beverages. The Appellate Body stressed the flexibility of the case-by-case approach. Declining to take a “static view” of the phrase “directly competitive or substitutable,” it held this phrase does not bar a panel from examining latent consumer demand (i.e., potential competition) when assessing a possible competitive relationship between imported and domestic products under the second sentence of GATT Article III:2. After all, “[c]ompetition in the market place is a dynamic, evolving process,” and, absent protectionist measures, consumer preferences will shift among domestic and imported goods. Thus, it is entirely appropriate to examine potential competition: the phrase “directly competitive or substitutable” suggests that a “competitive relationship . . . is not to be analyzed exclusively by reference to current consumer preferences.” Again invoking its report in Japan — Alcoholic Beverages, the Appellate Body pointed out that cross-price elasticities are one means of assessing latent demand. They predict the shift in demand that would result from a change in the price of a product caused by a change in the relative tax burden on domestic versus imported products. Continuing with this approach, the Appellate Body found nothing wrong in examining evidence on the nature (i.e., quality) of competition, or evidence from other markets, or in grouping products for comparative purposes in a manner that does not disregard individual product characteristics or alter the outcome of a case.

4. GATT/WTO The Third Pillar: National Treatment and GATT Article III (5) Q: Report of the Appellate Body, Korea-Taxes on Alcoholic Bererages (WT/DS75/AB/R, WT/DS84/AB/R) A: Thus, Korea — Alcoholic Beverages proved to be a reaffirmation of the approach articulated in Japan — Alcoholic Beverages to testing whether products are “directly competitive or substitutable” for purposes of the second sentence of GATT Article III:2. Further, the Appellate Body clarified that “actual” competition is not the only relevant form of competition, and that the market of the respondent is not the only relevant market. The Appellate Body adds a corollary to its extant doctrine, namely, that it is right and logical for a panel to examine potential competition, and to consider data from other markets. Reading between the lines of the Appellate Body report, probably it would be going too far to conclude products are “directly competitive or substitutable” solely on the basis of potential competition. Certainly, it would be invalid to say that to situate such a finding on data from third countries. But, a modest degree of actual competition, buttressed by a potential for more competition, certainly is a solid foundation.

5. GATT/WTO The Fourth Pillar: Non-Tariff Barriers and GATT Article XI 제11조 수량제한의 일반적 철폐 다른 체약당사자 영토의 상품의 수입에 대하여 또는 다른 체약당사자 영토로 향하는 상품의 수출 또는 수출을 위한 판매에 대하여, 쿼타, 수입 또는 수출 허가 또는 그밖의 조치 중 어느 것을 통하여 시행되는지를 불문하고, 관세, 조세 또는 그밖의 과징금 이외의 어떠한 금지 또는 제한도 체약당사자에 의하여 설정되거나 유지되어서는 아니된다. 이 조 제1항의 규정은 다음에 대하여는 적용되지 아니한다. (a) 식품 또는 수출체약당사자에게 불가결한 그밖의 상품의 중대한 부족을 방지 또는 완화하기 위하여 일시적으로 적용되는 수출의 금지 또는 제한 (b) 국제무역에 있어서 상품의 분류, 등급부여 또는 판매를 위한 표준 또는 규정의 적용에 필요한 수입 및 수출의 금지 또는 제한 (c) 다음 목적을 위하여 운영되는 정부조치의 시행에 필요한 것으로서 어떤 형태로든 수입되는 농산물 또는 수산물에 대한 수입의 제한 (i) 판매 또는 생산되도록 허용된 동종 국내상품의 수량, 또는 동종 상품의 실질적인 국내생산이 없는 경우에는 동 수입상품이 직접적으로 대체할 수 있는 국내상품의 수량을 제한하기 위한 것 또는 (ii) 동종 국내상품의 일시적인 과잉상태, 또는 동종 상품의 실질적인 국내생산이 없는 경우에는 동 수입상품이 직접적으로 대체할 수 있는 국내상품의 일시적인 과잉상태를 무상 또는 당시의 시장수준보다 낮은 가격으로 일정한 국내소비자집단에 이용가능하게 함으로써 제거하기 위한 것 (iii) 어떤 상품의 국내생산이 상대적으로 경미한 경우에 생산의 전부 또는 대부분을 그 수입산품에 직접적으로 의존하는 동물성 상품의 생산이 허용되는 물량을 제한하기 위한 것 Article XI: General Elimination of Quantitative Restrictions (QRS) 1.       No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party. 2.       The provisions of paragraph 1 of this Article shall not extend to the following: (a)      Export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party; (b)      Import and export prohibitions or restrictions necessary to the application of standards or regulations for the classification, grading or marketing of commodities in international trade; (c)      Import restrictions on any agricultural or fisheries product, imported in any form, necessary to the enforcement of governmental measures which operate: (i)  to restrict the quantities of the like domestic product permitted to be marketed or produced, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported product can be directly substituted; or   (ii)  to remove a temporary surplus of the like domestic product, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported product can be directly substituted, by making the surplus available to certain groups of domestic consumers free of charge or at prices below the current market level; or (iii)  to restrict the quantities permitted to be produced of any animal product the production of which is directly dependent, wholly or mainly, on the imported commodity, if the domestic production of that commodity is relatively negligible.

5. GATT/WTO The Fourth Pillar: Non-Tariff Barriers and GATT Article XI Article XI: General Elimination of Quantitative Restrictions Any contracting party applying restrictions on the importation of any product pursuant to subparagraph (c) of this paragraph shall give public notice of the total quantity or value of the product permitted to be imported during a specified future period and of any change in such quantity or value. Moreover, any restrictions applied under (i) above shall not be such as will reduce the total of imports relative to the total of domestic production, as compared with the proportion which might reasonably be expected to rule between the two in the absence of restrictions. In determining this proportion, the contracting party shall pay due regard to the proportion prevailing during a previous representative period and to any special factors which may have affected or may be affecting the trade in the product concerned. 제11조 수량제한의 일반적 철폐 이 항 (c)호에 따라 상품의 수입에 대한 제한을 적용하는 체약당사자는 특정한 장래의 기간중에 수입이 허용될 상품의 총량 또는 총액과 이러한 물량 또는 금액에 있어서의 변경을 공고하여야 한다. 또한, 위 (i)에 의하여 적용되는 제한은, 제한이 없을 경우 양자간에 성립될 것이 합리적으로 기대되는 총국내생산에 대한 총수입의 비율과 비교하여 동 비율을 감소시키는 것이어서는 아니된다. 체약당사자는 동 비율을 결정함에 있어서 과거의 대표적인 기간 동안 우세하였던 비율과 당해 상품의 무역에 영향을 주었을 수도 있거나 영향을 주고 있을 수도 있는 특별한 요소에 대하여 적절한 고려를 한다. Trade restrictions should be in the form of duties, taxes and other charges whether effective through quotas, import and export licenses and other measures, ultimately requiring the tariffication of all quantitative restrictions. All new trade measures to be in the form of tariffs.

5. GATT/WTO The Fourth Pillar: Non-Tariff Barriers and GATT Article XI (2) Q1: Assume Japan imports automobiles from the United States made by General Motors (GM) and Ford, and these imports have left-hand drive steering. The Japanese drive on the left side of the road and Japanese cars have right-hand drive steering. Cars imported into Japan from all other countries except the United States also have right-hand drive steering. Japan establishes a technical regulation requiring all imported cars to have right-hand drive steering. Cars not meeting the requirement are banned from the Japanese market. The United States Trade Representative (USTR) protests. Is the Japanese regulation consistent with the WTO Agreement on Technical Barriers to Trade (TBT Agreement)?

5. GATT/WTO The Fourth Pillar: Non-Tariff Barriers and GATT Article XI (2) A1: No. First, the regulation applies only to imported cars, not domestically-produced cars. Consequently, there is a violation of the national treatment principle in Article 2:1 of the TBT Agreement. Second, under Articles 2:2 and 2:3 of that Agreement, the regulation arguably is more trade-restrictive than necessary to fulfill a legitimate objective. GM and Ford could equip their cars with right-hand drive steering at a factory located in Japan. There is no need to ban all non-conforming imports, rather, what is needed is to ensure that the imports are conforming before they are driven on the road. Third, whether the technical regulation serves a legitimate objective is unclear. Of the objectives listed in the non-exclusive list in Article 2:2 of the Agreement, the protection of human health and safety is the one that the ban is most likely to support. However, the Japanese government must make a case, based on objective data, that left-hand drive steering leads to an increased risk of accidents.

Preparation, Adoption and Application of Technical Regulations Article 2   Preparation, Adoption and Application of Technical Regulations by Central Government Bodies With respect to their central government bodies: 2.1 Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country. 2.2 Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products. 2.3 Technical regulations shall not be maintained if the circumstances or objectives giving rise to their adoption no longer exist or if the changed circumstances or objectives can be addressed in a less trade-restrictive manner. 2019-07-14 국제거래법

a disguised barrier to imports of foreign cars? 5. GATT/WTO The Fourth Pillar: Non-Tariff Barriers and GATT Article XI (2) Q2: Assume Germany establishes new recycling requirements that require all automobile manufacturers to take back and recycle old cars. Are these requirements a disguised barrier to imports of foreign cars? A2: Possibly. The recycling requirements may favor products manufactured in or close to the home market. For example, German car companies may be more advanced than American and Japanese producers in designing cars that can be recycled. Moreover, it is probably easier for Mercedes, Audi, and Volkswagen to take back and recycle a car from Frankfurt than for Chrysler or Toyota to do so.

6. Limitation of powers of Contracting Party in nondiscriminatory actions * While GATT does permit nondiscriminatory “duties, taxes and other charges,” the powers of Contracting Party are limited even as to these devices. 제10조 무역규정의 공표 및 시행 1. 체약당사자가 시행하고 있는 법률·규정·사법판결 및 일반적으로 적용되는 행정결정으로서 관세목적을 위한 상품의 분류 또는 평가, 관세, 조세 또는 그밖의 과징금의 율, 수입 또는 수출, 또는 이를 위한 지급이전에 대한 요건, 제한 또는 금지에 관한 것이거나 상품의 판매, 유통, 운송, 보험, 창고보관, 검사, 전시, 가공, 혼합 또는 그밖의 사용에 영향을 주는 것은 각 정부 및 무역업자가 알 수 있도록 하는 방식으로 신속히 공표되어야 한다. 체약당사자 정부 또는 정부기관과 다른 체약당사자 정부 또는 정부기관간에 유효한, 국제무역정책에 영향을 주는 협정 또한 공표되어야 한다. 이 항의 규정은 체약당사자가 법률의 시행을 방해하거나 달리 공익에 반하거나 공사를 불문한 특정기업의 정당한 상업적 이익을 저해할 수 있는 비밀정보를 공개하도록 요구하는 것은 아니다. 2. 체약당사자가 취하는 일반적으로 적용되는 어떠한 조치도, 확립되고 일관된 관행 하에서 수입에 부과되는 관세 또는 그밖의 과징금의 율을 증가시키는 것이거나 수입 또는 수입을 위한 지급이전에 대하여 새롭거나 더 부담이 되는 요건, 제한 또는 금지를 부과하는 것은 동 조치가 공식적으로 공표되기 이전에 시행되어서는 아니된다. 3. (a) 각 체약당사자는 이 조 제1항에 기재된 종류의 자신의 모든 법률, 규정, 판결 및 결정을 일관되고 공평하며 합리적인 방식으로 시행한다. (b) 각 체약당사자는 특히 관세와 관련된 행정적 조치의 신속한 검토 및 시정의 목적을 위하여 사법, 중재 또는 행정 재판소 또는 절차를 유지하거나 실행가능한 한 조속히 설치한다. 동 재판소 또는 절차는 행정적 시행을 담당하는 기관으로부터 독립되어야 하며, 그 판결은 상소가 수입자에 의하여 제기되도록 정하여진 기간 내에 상위관할권의 법원 또는 재판소에 상소가 제기되는 경우가 아니면 동 기관에 의하여 이행되고 또한 동 기관의 행위를 규율한다. 단, 동 기관의 중앙행정관청은 그 판결이 확립된 법원칙이나 실제사실과 일치하지 아니한다고 믿을만한 충분한 이유가 있는 경우 다른 심의과정에서 동 문제에 관한 검토를 받기 위한 조치를 취할 수 있다. (c) 이 항 (b)호의 규정은 이 협정일자에 체약당사자의 영토에서 유효한 절차로서, 행정적 시행을 담당하는 기관으로부터 충분히 또는 정식으로 독립되어 있지 아니하다 하더라도 행정조치의 객관적이고 공평한 검토를 제시하는 절차의 철폐 또는 대체를 요구하는 것은 아니다. 동 절차를 채용하는 체약당사자는, 요청이 있을 경우, 동 절차가 이 호의 요건에 합치하는지 여부를 체약당사자단이 결정할 수 있도록 동 절차에 관한 충분한 정보를 체약당사자단에 제공한다. Transparency and GATT Article X (1) Why Transparency Matters non- transparency of rules is a non-tariff barrier to free, fair competition in two respects: First - some players are disadvantaged relative to players that understand the rules. Second - potential players - ones seeking entry into the game - are disadvantaged relative to players that understand the rules. Transparency merely demands that every current or prospective player have the chance to learn the rules . . . . . . NOT that all of them have a voice in shaping the rules (2) GATT Article X:1 …requires prompt publication in such a manner as to allow governments and traders to become acquainted with the law GATT Article X:2 ….calls for enforcement of laws only after they have been officially published GATT Article X:3 …speaks of the uniform, impartial, and reasonable administration of laws, the use of independent adjudicatory tribunals

can occur simultaneously. Query whether the United States might have a 6. Limitation of powers of Contracting Party in nondiscriminatory actions All trade measures of Members should be published and therefore transparent (Q) The liquor board of the province of British Columbia, Canada, establishes a new pricing policy. Information about this policy is shared with domestic brewers before it is made available to American authorities or brewers. The policy is announced in the British Columbia legislature only five days before it enters into effect. The United States alleges that British Colombia has violated GATT Article X. Is the United States correct? Why or why not? See GATT Panel Report, Canada — Import, Distribution and Sale of Certain Alcoholic Drinks by Provincial Marketing Agencies, B.I.S.D. (39th Supp.) at 27 (1991-92) (adopted 18 February 1992). (A) No. As the case citation in the Question suggests, the facts are drawn from an actual dispute. In the Canada — United States dispute, a GATT Panel found that while Article X imposes requirements relating to the prompt publication of trade regulations, this provision does not require a Contracting Party to make information available to domestic and foreign suppliers, or domestic suppliers and foreign authorities, at the same time. In addition, the Panel held, this Article does not require contracting parties to publish trade regulations in advance of their entry into force. Thus, publication and enforcement can occur simultaneously. Query whether the United States might have a claim under GATT Article III.

(2) Article XXVIII: Modification of Schedules & Tariff Negotiations 6. Limitation of powers of Contracting Party in nondiscriminatory actions (2) Article XXVIII: Modification of Schedules & Tariff Negotiations Article XXVIII: Modification of Schedules 1.       On the first day of each three-year period, the first period beginning on 1 January 1958 (or on the first day of any other period* that may be specified by the CONTRACTING PARTIES by two-thirds of the votes cast) a contracting party (hereafter in this Article referred to as the “applicant contracting party”) may, by negotiation and agreement with any contracting party with which such concession was initially negotiated and with any other contracting party determined by the CONTRACTING PARTIES to have a principal supplying interest* (which two preceding categories of contracting parties, together with the applicant contracting party, are in this Article hereinafter referred to as the “contracting parties primarily concerned”), and subject to consultation with any other contracting party determined by the CONTRACTING PARTIES to have a substantial interest* in such concession, modify or withdraw a concession* included in the appropriate schedule annexed to this Agreement. 2.       In such negotiations and agreement, which may include provision for compensatory adjustment with respect to other products, the contracting parties concerned shall endeavour to maintain a general level of reciprocal and mutually advantageous concessions not less favourable to trade than that provided for in this Agreement prior to such negotiations. 제28조 양허표의 수정 1. 체약당사자(이하 이 조에서는 “신청체약당사자” 라 칭한다)는 이 협정에 부속된 해당 양허표에 포함된 양허에 대하여, 동 양허를 최초로 협상한 체약당사자 및 체약당사자단이 주요공급이해를 가진다고 결정하는 다른 체약당사자(앞의 두 범주의 체약당사자는 신청체약당사자와 함께 이 조에서는 이하 “주요관련체약당사자들” 이라 칭한다)와 협상하고 합의함으로써, 그리고 동 양허에 대하여 실질적인 이해관계를 가진다고 체약당사자단이 결정하는 다른 체약당사자와 협의할 것을 조건으로, 1958년 1월 1일에 그 첫번째 기간이 시작되는 각 3년 기간의 첫째날(또는 행사된 투표의 3분의 2로 체약당사자단에 의하여 정하여질 수 있는 다른 기간의 첫째날)에 동 양허를 수정하거나 철회할 수 있다. 2. 다른 상품에 관하여 보상적 조정을 위한 규정을 포함할 수 있는 동 협상 및 합의에 있어서 관련체약당사자는 동 협상 이전에 이 협정에 제시된 것보다 무역에 불리하지 아니한 상호적이고 호혜적인 양허의 일반적 수준을 유지하도록 노력한다. Regulations concerning the modification of the schedule of trade regulations (‘bound’ rates). The use of negotiations to further reduce tariffs and other trade measures between Members on a reciprocal and mutually advantageous basis.

6. Limitation of powers of Contracting Party in nondiscriminatory actions (2) Article XXVIII*: Modification of Schedules 3.       (a)      If agreement between the contracting parties primarily concerned cannot be reached before 1 January 1958 or before the expiration of a period envisaged in paragraph 1 of this Article, the contracting party which proposes to modify or withdraw the concession shall, nevertheless, be free to do so and if such action is taken any contracting party with which such concession was initially negotiated, any contracting party determined under paragraph 1 to have a principal supplying interest and any contracting party determined under paragraph 1 to have a substantial interest shall then be free not later than six months after such action is taken, to withdraw, upon the expiration of thirty days from the day on which written notice of such withdrawal is received by the CONTRACTING PARTIES, substantially equivalent concessions initially negotiated with the applicant contracting party. (b)      If agreement between the contracting parties primarily concerned is reached but any other contracting party determined under paragraph 1 of this Article to have a substantial interest is not satisfied, such other contracting party shall be free, not later than six months after action under such agreement is taken, to withdraw, upon the expiration of thirty days from the day on which written notice of such withdrawal is received by the CONTRACTING PARTIES, substantially equivalent concessions initially negotiated with the applicant contracting party. 4.       The CONTRACTING PARTIES may, at any time, in special circumstances, authorize* a contracting party to enter into negotiations for modification or withdrawal of a concession included in the appropriate Schedule annexed to this Agreement subject to the following procedures and conditions: (a)      Such negotiations* and any related consultations shall be conducted in accordance with the provisions of paragraph 1 and 2 of this Article.  (b)      If agreement between the contracting parties primarily concerned is reached in the negotiations, the provisions of paragraph 3 (b) of this Article shall apply.  (c)      If agreement between the contracting parties primarily concerned is not reached within a period of sixty days* after negotiations have been authorized, or within such longer period as the CONTRACTING PARTIES may have prescribed, the applicant contracting party may refer the matter to the CONTRACTING PARTIES.  (d)      Upon such reference, the CONTRACTING PARTIES shall promptly examine the matter and submit their views to the contracting parties primarily concerned with the aim of achieving a settlement. If a settlement is reached, the provisions of paragraph 3 (b) shall apply as if agreement between the contracting parties primarily concerned had been reached. If no settlement is reached between the contracting parties primarily concerned, the applicant contracting party shall be free to modify or withdraw the concession, unless the CONTRACTING PARTIES determine that the applicant contracting party has unreasonably failed to offer adequate compensation.* If such action is taken, any contracting party with which the concession was initially negotiated, any contracting party determined under paragraph 4 (a) to have a principal supplying interest and any contracting party determined under paragraph 4 (a) to have a substantial interest, shall be free, not later than six months after such action is taken, to modify or withdraw, upon the expiration of thirty days from the day on which written notice of such withdrawal is received by the CONTRACTING PARTIES, substantially equivalent concessions initially negotiated with applicant contracting party.

3. (a) 1958년 1월 1일 이전 또는 이 조 제1항에 예견된 기간의 만료 이전에 주요관련체약당사자들간에 합의가 이루어질 수 없는 경우, 동 양허를 수정하거나 철회하겠다고 제의하는 체약당사자는 이에 불구하고 그렇게 할 자유가 있으며, 이러한 조치가 취하여지는 경우 동 양허를 최초로 협상한 체약당사자, 제1항 하에서 주요공급이해를 가진다고 결정되는 체약당사자, 그리고 제1항 하에서 실질적인 이해관계를 가진다고 결정되는 체약당사자는 동 조치가 취하여진 후 6월 이내에, 체약당사자단이 철회의 서면통보를 접수한 날로부터 30일이 만료된 때에 신청체약당사자와 최초로 협상한 실질적으로 동등한 양허를 철회할 자유가 있다. (b) 주요관련체약당사자들간에는 합의가 이루어졌으나 이 조 제1항 하에서 실질적인 이해관계가 있다고 결정된 다른 체약당사자가 만족하지 아니하는 경우 동 다른 체약당사자는 동 합의 하에서의 조치가 취하여진 후 6월 이내에, 체약당사자단이 철회의 서면통보를 접수한 날로부터 30일이 만료된 때에 신청체약당사자와 최초로 협상한 실질적으로 동등한 양허를 철회할 자유가 있다. 4. 체약당사자단은 특별한 상황에서는 언제든지, 다음 절차 및 조건에 따를 것을 조건으로 체약당사자가 이 협정에 부속된 해당 양허표에 포함된 양허의 수정 또는 철회를 위한 협상을 개시하도록 승인할 수 있다. (a) 동 협상 및 관련협의는 이 조 제1항 및 제2항의 규정에 따라 이루어진다. (b) 협상에서 주요관련체약당사자들간에 합의가 이루어지는 경우 이 조 제3항(b)의 규정이 적용된다. (c) 협상이 승인된 후 60일의 기간 이내 또는 체약당사자단이 정하였을 수 있는 더 긴 기간 이내에 주요관련체약당사자들간에 합의가 이루어지지 아니하는 경우 신청체약당사자는 동 문제를 체약당사자단에 회부할 수 있다. (d) 동 회부가 있는 경우 체약당사자단은 동 문제를 신속히 검토하고 해결을 위하여 체약당사자단의 견해를 주요관련체약당사자들에게 제출한다. 해결이 되는 경우 주요관련체약당사자들간에 합의가 이루어진 것처럼 제3항(b)의 규정이 적용된다. 주요관련체약당사자들간에 해결이 되지 아니하는 경우 신청체약당사자가 충분한 보상을 불합리하게 제공하지 아니하였다고 체약당사자단이 결정하지 아니하는 한 신청체약당사자는 동 양허를 수정하거나 철회할 자유가 있다. 이러한 조치가 취하여지는 경우 동 양허를 최초로 협상한 체약당사자, 제4항(a) 하에서 주요공급이해를 가진다고 결정되는 체약당사자, 그리고 제4항(a) 하에서 실질적인 이해관계를 가진다고 결정되는 체약당사자는 동 조치가 취하여진 후 6월 이내에, 체약당사자단이 철회의 서면통보를 접수한 날로부터 30일이 만료된 때에 신청체약당사자와 최초로 협상한 실질적으로 동등한 양허를 수정하거나 철회할 자유가 있다. 2019-07-14 국제거래법

6. Limitation of powers of Contracting Party in nondiscriminatory actions 5. 1958년 1월 1일 이전 그리고 제1항에서 예견된 기간의 종료 이전에 체약당사자는 체약당사자단에 통보함으로써 제1항 내지 제3항의 절차에 따라 해당 양허표를 수정할 권리를 차기 기간 동안 유보할 것을 선택할 수 있다. 어떤 체약당사자가 그렇게 선택하는 경우 다른 체약당사자는 동일한 절차에 따라 동 체약당사자와 최초로 협상한 양허를 수정하거나 철회할 권리를 동일한 기간 동안 가진다. 제28조의2 관세협상 1. 체약당사자들은 관세가 종종 무역에 대한 심각한 장애를 구성하며, 따라서 관세와 수입 및 수출에 대한 그밖의 과징금의 일반적 수준의 실질적인 인하, 특히 최소 수량의 수입까지도 억제하는 높은 관세의 인하를 지향하고 아울러 이 협정의 목적과 개별 체약당사자의 다양한 필요를 적절히 고려하여 이루어지는 상호적이고 호혜적인 기초 위에서의 협상이 국제무역의 확대에 매우 중요하다는 것을 인정한다. 그러므로 체약당사자단은 수시로 이러한 협상을 후원할 수 있다 (2) Article XXVIII*: Modification of Schedules 5.       Before 1 January 1958 and before the end of any period envisaged in paragraph 1 a contracting party may elect by notifying the CONTRACTING PARTIES to reserve the right, for the duration of the next period, to modify the appropriate Schedule in accordance with the procedures of paragraph 1 to 3. If a contracting party so elects, other contracting parties shall have the right, during the same period, to modify or withdraw, in accordance with the same procedures, concessions initially negotiated with that contracting party. Article XXVIII bis: Tariff Negotiations 1.       The contracting parties recognize that customs duties often constitute serious obstacles to trade; thus negotiations on a reciprocal and mutually advantageous basis, directed to the substantial reduction of the general level of tariffs and other charges on imports and exports and in particular to the reduction of such high tariffs as discourage the importation even of minimum quantities, and conducted with due regard to the objectives of this Agreement and the varying needs of individual contracting parties, are of great importance to the expansion of international trade. The CONTRACTING PARTIES may therefore sponsor such negotiations from time to time.

Article XXVIII bis: Tariff Negotiations 6. Limitation of powers of Contracting Party in nondiscriminatory actions 제28조의2 관세협상 1 2. (a) 이 조 하에서의 협상은 선별적인 상품별 기초 위에서 또는 관련체약당사자에 의하여 수락될 수 있는 다자간 절차의 적용에 의하여 수행될 수 있다. 이러한 협상은 관세의 인하, 당시 존재하던 수준에서의 관세의 양허 또는 개별관세나 특정 범주의 상품에 대한 평균관세가 특정한 수준을 초과하지 아니한다는 약속을 지향할 수 있다. 낮은 관세 또는 무관세대우를 인상하지 아니하겠다고 양허하는 것은 원칙적으로 높은 관세를 인하하는 것과 그 가치에 있어서 동등한 양허로 인정된다. (b) 체약당사자들은 일반적으로 다자간 협상의 성공이 그들 상호간 대외무역의 상당한 부분을 행하는 모든 체약당사자의 참가에 달려 있음을 인정한다. 3. 협상은 다음을 고려할 충분한 기회를 부여하는 기초 위에서 이루어져야 한다. (a) 개별 체약당사자 및 개별 산업의 필요 (b) 저개발국이 그들의 경제개발을 지원하기 위하여 관세보호를 더 융통성 있게 이용할 필요 및 이러한 국가가 세입 목적을 위하여 관세를 유지할 특별한 필요, 그리고 (c) 관련체약당사자의 재정상, 개발상, 전략상 및 그밖의 필요를 포함하는 그밖의 모든 관련상황 Article XXVIII bis: Tariff Negotiations 2.       (a)      Negotiations under this Article may be carried out on a selective product-by-product basis or by the application of such multilateral procedures as may be accepted by the contracting parties concerned. Such negotiations may be directed towards the reduction of duties, the binding of duties at then existing levels or undertakings that individual duties or the average duties on specified categories of products shall not exceed specified levels. The binding against increase of low duties or of duty-free treatment shall, in principle, be recognized as a concession equivalent in value to the reduction of high duties.       (b)      The contracting parties recognize that in general the success of multilateral negotiations would depend on the participation of all contracting parties which conduct a substantial proportion of their external trade with one another. 3.       Negotiations shall be conducted on a basis which affords adequate opportunity to take into account: (a)      the needs of individual contracting parties and individual industries;  (b)      the needs of less-developed countries for a more flexible use of tariff protection to assist their economic development and the special needs of these countries to maintain tariffs for revenue purposes; and  (c)      all other relevant circumstances, including the fiscal, developmental, strategic and other needs of the contracting parties concerned.

7. Safety valves for domestic pressures (1) Antidumping duties and Countervailing subsidies: GATT Article VI Members may apply duties and other measures can be applied to goods originating in other Members which are dumped and/or enjoy export subsidies subject to specific conditions. Article VI: Anti-dumping and Countervailing Duties 1.       The contracting parties recognize that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry. For the purposes of this Article, a product is to be considered as being introduced into the commerce of an importing country at less than its normal value, if the price of the product exported from one country to another (a)      is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country, or,  (b)      in the absence of such domestic price, is less than either  (i)  the highest comparable price for the like product for export to any third country in the ordinary course of trade, or  (ii)  the cost of production of the product in the country of origin plus a reasonable addition for selling cost and profit. Due allowance shall be made in each case for differences in conditions and terms of sale, for differences in taxation, and for other differences affecting price comparability. 2.       In order to offset or prevent dumping, a contracting party may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product. For the purposes of this Article, the margin of dumping is the price difference determined in accordance with the provisions of paragraph 1. 제6조 반덤핑 및 상계 관세 1. 체약당사자들은 덤핑, 즉 일국의 상품이 그 상품의 정상가격보다 낮게 타국의 상거래에 도입되는 것이 체약당사자 영토내의 기존 산업에 실질적인 피해를 야기하거나 야기할 우려가 있는 경우 또는 국내산업의 설립을 실질적으로 지연시키는 경우 이러한 덤핑이 비난받아야 한다는 것을 인정한다. 이 조의 목적상 일국에서 타국으로 수출되는 상품의 가격이 다음의 어느 하나에 해당되는 경우 동 상품은 정상가격보다 낮게 수입국의 상거래에 도입되는 것으로 간주된다. (a) 수출국에서 소비용인 때의 동종 상품에 대하여 정상적인 거래과정에서의 비교가능한 가격보다 낮은 경우 또는 (b) 이러한 국내가격이 없는 경우에는 다음 둘 중 하나보다 낮은 경우 (i) 정상적인 거래과정에서 제3국으로의 수출을 위한 동종 상품에 대한 최고의 비교가능한 가격 또는 (ii) 원산국에서의 상품의 생산비용에 판매비용 및 이윤을 합리적으로 가산한 것 판매조건의 차이, 과세의 차이 및 가격 비교가능성에 영향을 미치는 그밖의 차이점들에 대하여서도 각각의 경우에 적절한 고려를 한다. 2. 체약당사자는 덤핑을 상쇄하거나 방지하기 위하여 덤핑된 상품에 대하여 동 상품에 대한 덤핑마진을 초과하지 아니하는 만큼의 반덤핑관세를 부과할 수 있다. 이 조의 목적상 덤핑마진은 제1항의 규정에 따라 결정되는 가격차이다.

7. Safety valves for domestic pressures 제6조 반덤핑 및 상계 관세 3. 다른 체약당사자의 영토내로 수입되는 체약당사자 영토의 상품에 대하여는, 특정상품의 운송에 대한 특별보조금을 포함하여 원산국 또는 수출국에서 동 상품의 제조, 생산 또는 수출에 대하여 직접적 또는 간접적으로 지급된 것으로 결정된 장려금 또는 보조금의 추산액과 동일한 금액을 초과하여 어떠한 상계관세도 부과되지 아니한다. 상계관세라는 용어는 상품의 제조, 생산 또는 수출에 대하여 직접적 또는 간접적으로 부여된 장려금 또는 보조금을 상쇄할 목적으로 부과되는 특별관세를 의미하는 것으로 양해한다. 4. 다른 체약당사자의 영토로 수입되는 체약당사자 영토의 어떠한 상품도 원산국 또는 수출국에서 소비용인 때의 동종 상품이 부담하는 관세 또는 조세로부터 동 상품이 면제된다는 이유로 또는 이러한 관세 또는 조세가 환불된다는 이유로 반덤핑 또는 상계 관세의 부과대상이 되지 아니한다. 5. 다른 체약당사자의 영토 내로 수입되는 체약당사자 영토의 어떠한 상품도 덤핑 또는 수출보조금지급이라는 동일한 상황을 보상하기 위한 반덤핑 및 상계 관세의 병과대상이 되지 아니한다. (1) Article VI: Anti-dumping and Countervailing Duties 3.       No countervailing duty shall be levied on any product of the territory of any contracting party imported into the territory of another contracting party in excess of an amount equal to the estimated bounty or subsidy determined to have been granted, directly or indirectly, on the manufacture, production or export of such product in the country of origin or exportation, including any special subsidy to the transportation of a particular product. The term “countervailing duty” shall be understood to mean a special duty levied for the purpose of offsetting any bounty or subsidy bestowed, directly, or indirectly, upon the manufacture, production or export of any merchandise. 4.       No product of the territory of any contracting party imported into the territory of any other contracting party shall be subject to anti-dumping or countervailing duty by reason of the exemption of such product from duties or taxes borne by the like product when destined for consumption in the country of origin or exportation, or by reason of the refund of such duties or taxes. 5.       No product of the territory of any contracting party imported into the territory of any other contracting party shall be subject to both anti-dumping and countervailing duties to compensate for the same situation of dumping or export subsidization.

7. Safety valves for domestic pressures 제6조 반덤핑 및 상계 관세 (a) 어떠한 체약당사자도 덤핑 또는 보조금지급의 효과가 기존 국내산업에 실질적인 피해를 야기하거나 야기할 우려가 있는 정도이거나 국내산업의 설립을 실질적으로 지연시키는 정도라고 결정한 경우가 아니면 다른 체약당사자 영토의 상품수입에 대하여 반덤핑 또는 상계 관세를 부과하지 아니한다. (b) 체약당사자단은 체약당사자가 그 영토에 상품을 수출하는 또 다른 체약당사자 영토의 산업에 실질적인 피해를 야기하거나 야기할 우려가 있는 덤핑 또는 보조금지급을 상쇄할 목적으로 그 상품의 수입에 대하여 반덤핑 또는 상계 관세를 부과할 수 있도록 허용하기 위하여 이 항 (a)호의 요건을 면제할 수 있다. 체약당사자단은 보조금이 수입체약당사자의 영토에 관련상품을 수출하는 또 다른 체약당사자 영토의 산업에 실질적인 피해를 야기하거나 야기할 우려가 있다는 것을 인정하는 경우 상계관세를 부과할 수 있도록 이 항 (a)호의 요건을 면제하여야 한다. (c) 그러나 지연으로 인해 회복하기 어려운 손해가 초래될 수도 있는 예외적인 상황에서는, 체약당사자는 이 항 (b)에 언급된 목적을 위하여 체약당사자단의 사전승인 없이도 상계관세를 부과할 수 있다. 단, 동 조치는 즉시 체약당사자단에 보고되어야 하며, 체약당사자단이 승인하지 아니하는 경우에는 상계관세는 즉시 철회되어야 한다. 6.       (a)  No contracting party shall levy any anti-dumping or countervailing duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the dumping or subsidization, as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry. (b)  The CONTRACTING PARTIES may waive the requirement of subparagraph (a) of this paragraph so as to permit a contracting party to levy an anti-dumping or countervailing duty on the importation of any product for the purpose of offsetting dumping or subsidization which causes or threatens material injury to an industry in the territory of another contracting party exporting the product concerned to the territory of the importing contracting party. The CONTRACTING PARTIES shall waive the requirements of subparagraph (a) of this paragraph, so as to permit the levying of a countervailing duty, in cases in which they find that a subsidy is causing or threatening material injury to an industry in the territory of another contracting party exporting the product concerned to the territory of the importing contracting party.*  (c)  In exceptional circumstances, however, where delay might cause damage which would be difficult to repair, a contracting party may levy a countervailing duty for the purpose referred to in subparagraph (b) of this paragraph without the prior approval of the CONTRACTING PARTIES; Provided that such action shall be reported immediately to the CONTRACTING PARTIES and that the countervailing duty shall be withdrawn promptly if the CONTRACTING PARTIES disapprove.

(1) Article VI: Anti-dumping and Countervailing Duties 7. Safety valves for domestic pressures (1) Article VI: Anti-dumping and Countervailing Duties 7.       A system for the stabilization of the domestic price or of the return to domestic producers of a primary commodity, independently of the movements of export prices, which results at times in the sale of the commodity for export at a price lower than the comparable price charged for the like commodity to buyers in the domestic market, shall be presumed not to result in material injury within the meaning of paragraph 6 if it is determined by consultation among the contracting parties substantially interested in the commodity concerned that: (a)      the system has also resulted in the sale of the commodity for export at a price higher than the comparable price charged for the like commodity to buyers in the domestic market, and  (b)      the system is so operated, either because of the effective regulation of production, or otherwise, as not to stimulate exports unduly or otherwise seriously prejudice the interests of other contracting parties. 제6조 반덤핑 및 상계 관세 7. 수출가격의 변동과는 독립적으로 일차산품의 국내가격 또는 국내생산자의 소득을 안정시키기 위한 체제는 때때로 동종산품에 대하여 국내시장에서 구매자에게 부과되는 비교가능한 가격보다 낮은 가격으로 동 산품을 수출용으로 판매하는 결과를 초래하는 바, 당해 산품에 대하여 실질적인 이해관계가 있는 체약당사자간의 협의에 의하여 다음과 같이 결정되는 경우 제6항의 의미 내에서의 실질적인 피해를 야기하지 아니하는 것으로 추정된다. (a) 동 체제가 동종산품에 대하여 국내시장에서 구매자에게 부과되는 비교가능한 가격보다 높은 가격으로 동 산품을 수출용으로 판매하는 결과를 또한 초래하였다. 그리고, (b) 동 체제가, 효과적인 생산규제나 여타의 방법 둘 중 하나에 의하여 수출을 부당하게 촉진하거나 달리 다른 체약당사자의 이익을 심각하게 저해하지 아니하도록 운영된다.

7. Safety valves for domestic pressures (2) Anti-dumping actions If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product. Is this unfair competition? Opinions differ, but many governments take action against dumping in order to defend their domestic industries. The WTO agreement does not pass judgement. Its focus is on how governments can or cannot react to dumping — it disciplines anti-dumping actions, and it is often called the “Anti-Dumping Agreement”. (This focus only on the reaction to dumping contrasts with the approach of the Subsidies and Countervailing Measures Agreement.) The legal definitions are more precise, but broadly speaking the WTO agreement allows governments to act against dumping where there is genuine (“material”) injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporter’s home market price), and show that the dumping is causing injury or threatening to do so. GATT (Article 6) allows countries to take action against dumping. The Anti-Dumping Agreement clarifies and expands Article 6, and the two operate together. They allow countries to act in a way that would normally break the GATT principles of binding a tariff and not discriminating between trading partners — typically anti-dumping action means charging extra import duty on the particular product from the particular exporting country in order to bring its price closer to the “normal value” or to remove the injury to domestic industry in the importing country.

(2-1) AD Agreement (a) Introduction The Anti-Dumping Agreement of the World Trade Organization (WTO), commonly known as the AD Agreement, governs the application of anti-dumping measures by WTO member countries. A product is considered to be "dumped" if it is exported to another country at a price below the normal price of a like product in the exporting country. Anti-dumping measures are unilateral remedies (the imposition of anti-dumping duties on the product in question) that the government of the importing country may apply after a thorough investigation has determined that the product is, in fact, being dumped, and that sales of the dumped product are causing material injury to a domestic industry that produces a like product. All members of the WTO are parties to this Agreement, whose full name is the "Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994". It went into effect on January 1, 1995. Pursuant to the Doha Ministerial Declaration, negotiations for the Anti-Dumping Agreement are currently underway. The agreement has no expiration date. The AD Agreement ensures that WTO members will not apply anti-dumping measures arbitrarily. It provides detailed substantive requirements for determining whether dumping and injury are, in fact, taking place, and sets forth elaborate procedures that governments must follow when they conduct anti-dumping investigations and impose anti-dumping duties. The Agreement ensures that all proceedings will be transparent and that all interested parties have a full opportunity to defend their interests.