1. The cause of Kodak's attack on Fuji
The story happened in an extreme background, the Uruguay Round. Japan's import tariffs on color and black-and-white films have been reduced to zero, that is, there are no obstacles for foreign products, such as Kodak of the United States, to enter the Japanese market. Fuji and Kodak are the two overlords in the film industry in the world. In the Japanese market, Kodak is always looking for opportunities to beat its rivals.
Kodak can hardly find fault with Japan on the issue of market access. So how to use WTO rules to find the breakthrough point to defeat your opponent? Kodak used paragraph 1 of Article XXIII of GATT. The United States said that Japan did not violate a special obligation clause of the WTO, and Japan realized its tariff concessions in previous rounds. However, the Japanese government's measures on film sales have caused the United States to lose or diminish the benefits due to the tariff concessions made by Japan in the Kennedy Round, the Tokyo Round and the Uruguay Round, which violates Article 23, paragraph 1, of GATT.
specifically, Japan's measures to restrict circulation accused by the United States encouraged and promoted the change of Japanese film market sales system from multi-brand shopping malls to single-brand monopoly sales, thus restricting the sales ability of imported films and hindering Kodak's market development ability.
ruled that
the United States lost the case. The WTO expert group believes that the easiest way to determine whether a situation can be foreseen during the negotiation is to see whether this situation appears before or after the negotiation. Japan has proved with sufficient materials that the monopoly sales system already exists in the negotiation process.
Comments
This case shows that even under zero tariffs, enterprises still need to use rules to win the market like Kodak, and they can also use rules to resist the impact like Fuji.
II. Cause of the US-Japan Automobile Trade War
On May 16, 1995, the US government unilaterally announced that it would impose a 1% tariff on luxury cars from Japan according to Sections 31 and 34 of the US Trade Act of 1974 (the "Section 31" of the unilateral retaliation system).
Japanese cars account for a quarter of the American market, while American cars only account for 1.5% of the Japanese market. In the auto parts trade between the two sides, the United States has a deficit of $12.8 billion. In July 1993, although Japan agreed to negotiate to solve the opening problem of the automobile market, it actually refused to enter the negotiation procedure with the United States. Therefore, the United States has adopted such measures, demanding that Japan open its market to the world's automakers, and that the Japanese market should be transparent and competitive.
This involves a question of principle in world trade: Is the unilateralism of American retaliation under Article 31 compatible with the multilateralism of the dispute settlement system of the World Trade Organization? In short, does the United States have the right to unilaterally make sanctions decisions and implement sanctions measures before the WTO dispute settlement body makes a decision?
out of dissatisfaction with the unilateral retaliation system of the United States, on November 25, 1998, the European Union sued the United States according to WTO regulations, arguing that Article 31 was inconsistent with the corresponding provisions of the WTO, which caused the loss or damage of the interests of the European Union and also damaged the objectives of the General Agreement on Tariffs and Trade and the World Trade Organization.
ruling
The expert group finally ruled that the United States cannot unilaterally determine the sanctions before the WTO dispute settlement body makes a decision, but Article 31 does not violate the relevant provisions of the World Trade Organization and the General Agreement on Tariffs and Trade. This ruling has enabled the United States to actually use Article 31 to impose trade sanctions and threats on other countries, especially unilateral sanctions against non-members of the WTO.
Comments
After China's accession to the WTO, although the trade disputes we will face in the future can be solved accordingly under the multilateral framework of the World Trade Organization, we should also pay attention to the harm caused by unilateral sanctions such as the implementation of Article 31 by the United States. In case of such a situation, we should fight for it, jointly file a complaint with other injured parties, and safeguard China's interests according to the multilateral dispute settlement mechanism of the World Trade Organization.
iii. Korean liquor tax case
Cause
According to the Korean liquor tax law, South Korea imposes a 35% tax on domestic shochu, while the tax rate on other imported distilled spirits (whisky, vodka, rum, etc.) is 1%. The European Union and the United States believe that South Korea violates the second paragraph of Article III of GATT1947, that is, the national treatment clause of domestic tax. The key of this case is to determine whether distilled spirits such as whisky and vodka are the same products as traditional shochu in Korea. Because according to paragraph 2 of Article 3 of GATT, this paragraph can only be invoked if the tax on the same product is higher than that on domestic products. If it is not the same product, it is natural to levy different taxes.
During the preparation, Korean lawyers specially consulted Japan (there have been similar cases in Japan) about who is suitable as an expert in this case. Japan gave a very practical suggestion. Japan said that since the case involved alcohol and the expert himself should be a drinker, he could taste the difference between whisky and shochu. In addition, South Korea believes that in order to prove that shochu and whisky are not the same products, we can start with the price difference. Whiskey is 12 times more expensive than shochu. According to the general rules of anti-monopoly law, two products with such a huge price gap do not constitute competition and substitution (and then they are not the same products).
South Korea believes that if there is a lawyer with anti-monopoly law background in the expert group, it will help to open a gap in this case from the identification of the same product. South Korea is also actively preparing materials for responding to the lawsuit from all aspects. For example, the most powerful evidence was found in a guide to exporting food to South Korea published by the European body at that time. This book tells the difference between shochu and whisky. In addition, South Korea paid attention to every detail. For example, at the hearing, in order to overcome the language difficulties, South Korea carefully prepared written materials, and all questions were answered according to the written materials.
ruling
Unfortunately, the final result of this case was that South Korea lost the case. However, South Korea has accumulated a lot of practical experience in this case, which has provided help for its future handling of international trade disputes.
Comments
China enterprises have suffered many bilateral disputes, but our actual combat experience and ability are still insufficient. Therefore, it is urgent for us to learn to use the trade dispute settlement mechanism.
IV. US steel anti-dumping case
Cause of action
In p>1996, due to the rapid growth of steel imports to the United States, American steel companies expressed their great concern to the US government through trade associations and demanded an anti-dumping investigation. In order to ensure the smooth initiation of anti-dumping investigation by the government, the American Iron and Steel Institute provided detailed materials in various aspects. In 1998, a series of draft legislation related to the steel crisis was submitted to the US Congress. On January 5, 1999, the President of the United States submitted an action plan to the Congress of the United States. In the action plan, the President promised to take action to protect the steel industry in the United States and to avoid this increase in imports in the future. The American government also negotiated with Russia for the benefit of the steel industry, and finally reached an agreement.
Comments
When an international trade dispute occurs, the first thing an enterprise should do is not to go to court in the WTO, but to lobby the government and seek support through domestic industry organizations and chambers of commerce. In particular, learn to use the legal basis that is beneficial to you and try your best to open up the negotiation space for bargaining and mediation.
V. Friction of Wool Fabric between the United States and India
The United States imposed transitional protective measures, and began to restrict the import of men's and women's shirts made of wool fabric from India on April 18th, 1995. Before the implementation of the measures, the United States and India held consultations on the former's claim that importing wool fabrics for men's shirts and women's shirts would cause serious damage to domestic enterprises. As the consultation failed to produce a satisfactory solution, India submitted the case to the WTO for settlement.
ruling
after reviewing the facts, the expert group found that the United States did not review all the economic variables listed in Article 6 of the Agreement on Textiles and Clothing when determining whether increasing imports would cause damage to domestic enterprises. These variables must be taken into account when determining the causal relationship between harming domestic enterprises and increasing imports. The United States has not examined whether the damage to domestic enterprises is the result of changes in customer preferences or technological updates, as required by the clause. Therefore, the expert group concluded that the United States violated its obligations under the Agreement on Textiles and Clothing by implementing temporary protection measures. The resolution of the expert group implemented by the United States revoked the transitional protection measures.
Comments
The agreement on textiles and clothing requires countries that impose discriminatory restrictions on imported textiles and clothing to gradually lift the restrictions within a 1-year period, ending on January 1, 25. Although the goal of the agreement is to promote the removal of these restrictions, importing countries are allowed to adopt transitional protective measures to restrict imports if the import of certain types of textiles brings "the danger of serious damage or poses a real threat" to domestic enterprises producing similar products. Article 6 of the agreement states economic factors (such as changes in output, productivity, capacity utilization, inventory, market share, export, wages, employment, domestic market price, profit and investment), which must be taken into account when deciding whether increasing imports will cause damage. The agreement further stipulates that if the serious damage or actual threat is caused by other factors, such as technological updates or changes in customer preferences, such protective measures shall not be enforced.