1 North American Free Trade Law Chapter 14 © 2002 West/Thomson Learning.
-
Upload
luisa-radcliff -
Category
Documents
-
view
213 -
download
0
Transcript of 1 North American Free Trade Law Chapter 14 © 2002 West/Thomson Learning.
1
North American Free Trade LawNorth American Free Trade Law
Chapter 14
© 2002 West/Thomson Learning
2
Coexistence of GATT and regional trade areas
Coexistence of GATT and regional trade areas
GATT Art. 24 states “ the provisions of the Agreement shall not prevent...the formation of a customs union or free trade area”
GATT emphasizes: The purpose of a customs union or of a free trade area should be to facilitate trade between territories and not to raise barriers to the trade of other WTO trade countries
3
Levels of Economic Integration
Free Trade Area
Customs Union
Common Market
Economic Union
Political Union
Level of Integration
NAFTA
EU 1992
4
Free Trade Area vs. Customs Union Free Trade Area vs. Customs Union
Free Trade Area: free movement of goods and services among members
Customs Union: Free Trade Area plus common external tariff
Common Market: Customs Union plus free movement of goods and people among members
Economic Union: Common Market plus common currency and central bank, common economic policies
5
NAFTA DebateNAFTA Debate Canadian Free Trade Agreement, precursor
of NAFTA, in effect January 1, 1989 Issues involved “free trade” vs.
protectionism (“Giant Sucking Sound” of jobs going to Mexico) Impact on workers Environmental impact
Proposed extension of NAFTA: Free Trade in the Americas: 34
countries - target date 2005 - not realistic
6
NAFTANAFTA North American Free Trade Agreement
– Jan. 1, 1994: US, Canada and Mexico After 5 years (1993-98) 65% of the
tariffs eliminated Remainder phased out over 10-15
years Tariffs and nontariff barriers eliminated
by 2008 Some backsliding on commitments – US
restrictions on Mexican trucks
7
NAFTA: Trade and Tariff Provisions Trade Agreement covering trade in goods,
services, investment Cooperation on antitrust policy Provisions re: environment and labor
stds. National treatment – once goods are in
country, no difference in treatment based on origin
Tariff elimination – phased out entirely by 2008
Elimination of non tariff barriers
8
Rules of Origin are Central to NAFTA
Rules of Origin are Central to NAFTA
NAFTA Certificate of Origin: Required unless under $1000 (M), $2500
(US) or C$1600 (C) Marketing and labeling rules - Annex 311
Use tariff classification shift test rather than substantial transformation test to determine whether good is from one of the three countries (each component must have undergone a tariff classification change too)
Regional value content requirement
9
Major Areas of ImpactMajor Areas of Impact
Automobiles and parts: phased out duties by 2004 (as of 2001 cars must have 62.5% North American content to qualify for duty free)
Textiles Agriculture Services Investment Intellectual property Environment and labor
10
TextilesTextiles
NAFTA phased out tariffs on textiles by 2004 on goods that meet North American Value content requirement US quotas on Mexican textiles
eliminated New Quotas only in “emergency
situations” Complex rules for determining origin
of textiles
11
AgricultureAgriculture
15 year phase-out of duties Most eliminated by 2004 Certain sensitive produce were regulated
by tariff rate quotas – expired 1/1/2008 US: sugar, eggs, orange juice and
poultry Canada: wheat, dairy products Mexico: corn, beans and dairy
products
12
Access to Government ProcurementAccess to Government Procurement
No discrimination in treatment of bids for government goods and services Contracts greater than $50,000 and
construction projects greater than $6.5 million
Exception for national defense and weapons
NAFTA members must provide system to allow challenges to awards and procedures
13
Emergency Action to Protect Domestic Industry
NAFTA Safeguards Provisions: After 2004, members can only take action
with consent of other country “ ...where increased quantities of a
particular good are a substantial cause of serious injury or threat thereof, to a domestic injury producing a like or directly competitive good”
NAFTA provisions more limited than GATT: only applied to NAFTA imports if are significant share of imports and contribute importantly to serious injury Postpone any decreases, or increasing duty
– no higher than MFN level Must agree with exporting country on
compensation
14
ServicesServices
General principle of liberalization and access Apply national treatment and MFN
status US and Canada had largely opened
borders under CFTA Mexico phased out restrictions by 2000
Financial services: banks, insurance, securities, other financial services
15
Transportation NAFTA does not affect member domestic regulation of trucking or bus
companies Members developing common safety standards for trucks and for license
certifications NAFTA required full access was by 2000 for trucks and busses US delayed access for Mexican trucks – safety issues and inspection
difficulties Mexico sought dispute resolution panel – panel held for Mexico ( In the
matter of Cross Border Trucking) 2001: Bush Admin. Announces plan to lift moratorium Aug. 2004: Sup. Ct. holds no need to consider environmental impact of
lifting moratorium Pilot Program begun September 2007 – allows Mexican trucks into US beyond
25 mile border zone Political dispute – Congress cut off funding for program in 2008 budget,
ending the program Mexico imposed $2.4 billion in retaliatory tariffs on US exports July 2011 – US and Mexico agreed on resolution: US will allow Mexican trucks
to travel into US, subject to monitoring for safety standards; Mexico phased out tariffs
Oct. 2011 – US sets up pilot program allowing some Mexican trucks into US Jan. 2012 – Teamsters Union files suit to block program
16
Telecommunications Tariffs eliminated in 2004 NAFTA requires non-
discriminatory access to all North American public telecommunications networks
Members can impose reasonable technical standards to protect network safety and prevent equipment damage
17
Cross Border InvestmentsCross Border Investments Liberalize restrictions on investment
from member states NAFTA allows restrictions (national
security and particular industries): US: nuclear power, broadcast industry,
airlines, mining, customs brokers Canada: “cultural industries”, broadcasting Mexico: land, cable tv, air and land
transportation, oil industry NAFTA protections from expropriation:
public purpose, due process, fair compensation
Metal Clad Corp v. Mexico : “permit” process used to facilitate expropriation
18
Intellectual Property Rights
NAFTA adopts basic tenets of international I.P. agreements
IP rights protected by national law and GATT/TRIPS
Nondiscrimination: citizenship can not be a requirement
19
NAFTA Labor and Environmental Commissions
NAFTA Labor and Environmental Commissions
Added to agreement to appease groups in US lobbying against NAFTA – prevent “race to the bottom”
N.A. Commission for Environmental Cooperation – cooperation in enforcement of environmental laws
N.A. Labor Commission for Labor Cooperation – oversees agreement and promotes cooperation; make labor policies uniform
Commissions can convene panels to resolve disputes
20
Rights to Temporary Entry NAFTA doesn’t create common labor
market No free movement of people Members still determine own
immigration policy Business visitors, traders, potential
investors, managers, transferees, qualified professionals
Mexico: requires FMN card valid for 30 days; special visas for longer stays
21
Dispute SettlementDispute Settlement NAFTA Fair Trade Commission oversees
implementation of agreement Arbitral panels: can’t order member to
change laws or policies Antidumping and countervailing duties cases:
Duties or CVD imposed by administrative agencies of member countries
Appeals of decisions go to NAFTA binational panels Extraordinary Challenge committees:
Limited review of panel decisions Synthetic Baler Twine: standard of review is that
of judicial review of appropriate national court
22
Maquiladora Plants Preceded NAFTA – S.9802
allows for reduced US tariff on goods re-imported after assembly
Samsonite v. U.S.: was process fabrication or assembly – look to nature of processing
Social responsibility of maquiladora plants?
23
Web Sites http://www.usmcoc.org/ http://www.ftaa-alca.org http://www.nafta-sec-alena.org http://www.naftaworks.org/ http://www.nafta-customs.org http://www.cocef.org/ http://www.naalc.org http://www.usmoc.org/