MAIN LEGAL SUPPORT TO COMPETITION

Customs

Art. 3(a) 10-17

Quotas

Art. 30-37

Restricting Arrangements

Art 81(85)

Dominant Position

Art. 82(86)

Governmental Aid

Art. 92-94

Tax Discrimination

Art. 95-99

ILLUSTRATIVE CASES

Customers & Quotas• National type approval

regulation-British safety and technical standards. 1981

• Cassis de Dijon Rewe Zentral against German Federal Monopoly Administration

• Asterix & Cleopatre Art.36

Cartels & Monopoles • Grunding-Consten

Territorial Protection• Nintendo Case• Check Point Case

Governmental aid Tax Discrimination• Schul Case Import to

Holland from Monaco of second hand yacht

Article 81 (ex Article 85)   

1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

 (b) limit or control production, markets, technical development, or investment;

 (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent

transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

 

2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

 3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:

 — any agreement or category of agreements between undertakings;

 — any decision or category of decisions by associations of undertakings;

 — any concerted practice or category of concerted practices,

 which contributes to improving the production or

distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

 (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;

 (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

 

 

Article 82 (ex Article 86)   

 Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member States. 

Such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase or

selling prices or other unfair trading conditions; (b) limiting production, markets or technical

development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

 

(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

EU-ISRAEL ASSOCIATION AGREEMENT

PRINCIPLES• Political Dialogue (I)• Expansion of Trade in

Goods (II) and Services • Progressive Liberalization

of Public Procurements

• Progressive Liberalization of Capital Movement

• Intensification of Cooperation in Science & Technology

• Encourage Regional Cooperation

• Title III: Right of Establishment & Supply of Services

• Title IV: Capital Movement, Payments, Public Procurement, Competition & Intellectual Property

• Title V: Scientific & Technological Cooperation • Title VI: Economic Cooperation• Title VII: Cooperation on Audiovisual &

Cultural Matter, Information & Communication• Title VIII: Social Matters

12. NAFTA Agreement

NORTH AMERICAN FREE TRADE AGREEMENT

January 1994 OBJECTIVES

• Eliminates Barriers to Trade

• Promote Conditions of Fair Competition

• Increase Investment Opportunities

• Provide Protection of Intellectual Property

MOTIVATIONS

• GATT Dissatisfaction Progress

• EU Expansion

• Attract Investments

• Promote International Trade

OBJECTIVES

a. eliminate barriers to trade in, and facilitate the cross-border movement of goods and services between the territories of the Parties;

b. promote conditions of fair competition in the free trade area;

c. increase substantially investment opportunities in the territories of the Parties;

d. provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory;

e. create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and

f. establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement."

Under the North American Free Trade Agreement (NAFTA), tariffs on virtually all originating goods traded between Canada and Mexico will be eliminated by 2003. Tariffs on qualifying goods traded between Canada and the United States became duty free on January 1, 1998.

OPERATIONS

• Commission for Environment• Commission for Cooperation (Montreal)• Commission for Labor

Cooperation( Dallas)• North American Bank (San

Antonio) • Working Groups

CONTENT

• Trade In Agriculture

• Fifteen Years Transition

• Trade in Services, Telecommunication, Finance

• Competition Policy

• Intellectual Property

• Rules of Origin

North American Free Trade Agreement

PART ONE: GENERAL PART

Chapter One: ObjectivesChapter Two: General Definitions

PART TWO: TRADE IN GOODS

Chapter Three: National Treatment and Market Access for GoodsAnnex 300-A: Trade and Investment in the Automotive SectorAnnex 300-B: Textile and Apparel Goods

Chapter Four: Rules of OriginChapter Five: Customs ProceduresChapter Six: Energy and Basic PetrochemicalsChapter Seven: Agriculture and Sanitary and Phytosanitary MeasuresChapter Eight: Emergency Action

PART THREE: TECHNICAL BARRIERS TO TRADE Chapter Nine: Standards-Related Measures

PART FOUR: GOVERNMENT PROCUREMENT Chapter Ten: Government Procurement

Chapter Four: Rules of OriginChapter Five: Customs ProceduresChapter Six: Energy and Basic PetrochemicalsChapter Seven: Agriculture and Sanitary and Phytosanitary MeasuresChapter Eight: Emergency Action

PART THREE: TECHNICAL BARRIERS TO TRADE Chapter Nine: Standards-Related Measures

PART FOUR: GOVERNMENT PROCUREMENT Chapter Ten: Government Procurement

PART FIVE: INVESTMENT, SERVICES AND RELATED MATTERS

Chapter Eleven: InvestmentChapter Twelve: Cross-Border Trade in ServicesChapter Thirteen: TelecommunicationsChapter Fourteen: Financial ServicesChapter Fifteen: Competition Policy, Monopolies and State EnterprisesChapter Sixteen: Temporary Entry for Business Persons

PART SIX: INTELLECTUAL PROPERTY

Chapter Seventeen: Intellectual Property

PART SEVEN: ADMINISTRATIVE AND INSTITUTIONAL PROVISIONS

Chapter Eighteen: Publication, Notification and Administration of LawsChapter Nineteen: Review and Dispute Settlement in Antidumping and Countervailing Duty MattersChapter Twenty: Institutional Arrangements and Dispute Settlement Procedures

PART EIGHT: OTHER PROVISIONS

Chapter Twenty-One: ExceptionsChapter Twenty-Two: Final Provisions

Annex 401: Specific Rules of Origin

RVC= regional value content

TV VNM---------------

TV

TV

is the transaction value of the good adjusted to a F.O.B. basis; and

VNM

is the value of non-originating materials used by the producer in the production of the good.

NAFTA RESULTS CANADA USA MEXICO

• 16% Employment growth

• 109% exports growth (29% to others)

• Exports to Mexico doubled

•127% Investment increase to US

•Six times increase to Mexico

• Export growth doubled(59% others)

• 12% Employment growth

• Export growth 238%

• 28% Employment growth

NAFTA has enabled both Canada and Mexico to increase their exports to the United States: Canadian manufacturers now send more than half their production to the U.S., while Mexico’s share of the U.S. import market has almost doubled from 6.9% in pre-NAFTA 1993 to 11.6% in 2002.

Today, 86.6% of total merchandise exports go to our NAFTA partners. And close to 2.3 million jobs have been created in Canada since 1994, representing an increase of 17.5% over pre-NAFTA employment levels.

U.S. Agricultural Exports to NAFTA Partners Have Increased by $4 Billion Since 1994

Source: NAFTA AT SEVEN Its impact on workers in all three nations Economic Policy InstituteApril 2001 | EPI Briefing

13. The World Trade Organization

WORLD TRADE ORGANIZATION

• General Agreement on Tariffs & Trade (GATT)

From Geneva(1947) – 23 Countries to

Uruguay Round (86-94) 120 Countries

Constrain Governments from Imposing or Continuing a Variety of Measures that Restrain or Distort International Trade

• Marrakech 15 April 1994 - WTO • China 2001(143 Members)

The new rules and commitments apply to:

•market access — various trade restrictions confronting imports

•domestic support — subsidies and other programmes, including those that raise or guarantee farmgate prices and farmers’ incomes

•export subsidies and other methods used to make exports artificially competitive.

Agreement on Agriculture Agreement on Sanitary and Phytosanitary Measures Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries Agreement on Textiles and Clothing Agreement on Technical Barriers to Trade Agreement on Trade-Related Investment Measures Anti-Dumping) Customs Valuation) Preshipment Inspection Agreement on Rules of Origin Agreement on Import Licensing Procedures Agreement on Subsidies and Countervailing Measures Agreement on Safeguards General Agreement on Trade in Services Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods

MAIN RESULTS

• Agriculture Domestic Support less 20% (developing 13.3%) in 6 Years; Subvention to Exports 36%-21%

NTB’s Converted to Tariffs & cut by 36%• Textiles: MFA quota dismantled 1995-2005, tariffs

reduced• Telecommunication services 69 Countries (Feb 1997)• Information Technology 49 Countries (Feb 1997)• Financial Services 70 Countries (Feb 1997)

The WTO holds its main ministerial conferences roughly every two years, and they are the WTO's highest authority. The first ministerial was held in Singapore in December 1996. The second was held in Geneva in May 1998. Seattle hosted the third ministerial conference between November and December 1999. Doha hosted the last conference in November 2001. 2003's WTO ministerial conference will take place in Cancun, Mexico in September.

TABLE OF CASES CITED IN THIS REPORT

Short Title Full Case Title and Citation

Brazil – Aircraft

(Article 22.6 – Brazil) 

Decision by the Arbitrators, Brazil – Export Financing Programme for Aircraft – Recourse to Arbitration by Brazil under Article 22.6 of the DSU and Article 411 of the  SCM Agreement, WT/DS46/ARB, 28 August 2000

Canada – Aircraft Credits and Guarantees

(Article 22.6 – Canada) 

Decision by the Arbitrator, Canada – Export Credits and Loan Guarantees for Regional Aircraft – Recourse to Arbitration by Canada under Article 22.6 of the DSU and Article 411 of the SCM Agreement, WT/DS222/ARB, 17 February 2003

EC – Bananas III (Ecuador) (Article 22.6 – EC) 

Decision by the Arbitrators, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS27/ARB/ECU, 24 March 2000, DSR 2000:V, 2243

EC – Bananas III (US) (Article 22.6 – EC) 

Decision by the Arbitrators, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS27/ARB, 9 April 1999, DSR 1999:II, 725

EC – Hormones (US) (Article 22.6 – EC) 

Decision by the Arbitrators, European Communities – Measures Concerning Meat and Meat Products (Hormones) – Original Complaint by the United States – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS26/ARB, 12 July 1999, DSR 1999:III, 1105

EC – Hormones (Canada) (Article 22.6 – EC) 

Decision by the Arbitrators, European Communities – Measures Concerning Meat and Meat Products (Hormones) – Original Complaint by Canada – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS48/ARB, 12 July 1999, DSR 1999:III, 1135

VII AWARD AND DECISION OF THE ARBITRATORS

154 For the reasons set out above, we conclude that the European Communities may suspend obligations under GATT 1994 and the Anti-Dumping Agreement against imports from the United States.

But such rulings are hardly the norm. In one highly publicized case, the WTO ruled in January 1999 that the EU could no longer give preferential treatment to banana imports from former colonies in the Caribbean, a decision which is likely to hurt the region's already-impoverished, primarily small-scale banana farmers. Who brought up the complaint? The US -- home base to banana giants Chiquita, Dole, and Del Monte, which control an estimated two-thirds of world banana exports.

But what's so terrible about global free trade? Trade is one thing, but unrestricted, worldwide, corporate-dominated trade runs roughshod over the environment, workers' rights, small nations, and local self-determination, critics say.

Lori Wallach and Michelle Sforza, co-authors of Public Citizen/Global Trade Watch's "Whose Trade Organization?" have made a study of the 167 contested trade issues brought to the WTO as of last March. Their conclusion: In every case in which an environmental, health, or food safety law was challenged at the WTO, such laws have been declared illegal barriers to trade. WTO rulings have forced South Korea to lower meat safety rules and the US to weaken its Clean Air Act, to cite just two.

www.MotherJones.com

What's on the agenda at Cancun?

WTO ministers will negotiate the "Doha Agenda", which is the current round of trade negotiations launched at the last Ministerial Meeting in Doha. Trade negotiations on different issues are linked together so that countries can make trade-offs between different agreements. At Cancun, the agenda includes four new issues: investment, competition policy, transparency in government procurement, and trade facilitation (ie custom procedures), as well as the huge number of on-going negotiations on issues like agriculture, market access and drug patent rules.

The 5th Ministerial Meeting in Cancun came to a dramatic end without agreement on 14 September 2003, leaving negotiations in a deadlock. On the agenda were a range of issues agreed upon at the 2001 Ministerial Meeting in Doha, including agriculture, services, e-commerce and the environment. The European Union had continued to push for an expansion of the WTO's powers to include new issues (investment, competition policy, government procurement and trade facilitation), until the eleventh hour, insisting that these issues get dealt with first before the development issues that should have been at the top of the agenda.

Despite the Ministerial Meeting's abrupt ending, the outcome is not a negative one. It was the only option for the developing countries, as no deal is better than a bad deal at this stage. Developing countries refused to be pushed into a corner and have proven they are a force to be reckoned with at the WTO negotiating table.

•Barry CoatesWorld Development Movement

We live in a world where the problem is not that the governments have too much control over corporations, and they use it to discriminate against multinationals, the problem is that multinationals have too much power and they discriminate against governments. That is the fundamental problem with the WTO. The WTO as an intergovernmental agreement is primarily there to stop governments from interfering with the market. And I think we have to question that as the pre-eminent system of global economic rules that it is becoming.

http://www.wdm.org.uk/campaign/cancun03/cancun.htm

How does the WTO affect workers rights?

Why, then, will some of the biggest demonstrations in Seattle be organized by workers and labor unions? Outrage over abusive sweatshop conditions throughout the developing world, for one thing. But laborers in the United States are also feeling the impact of the global economy directly, especially in the aftermath of NAFTA. According to Ron Judd, executive director of the King County Labor Council, the US has lost 537,000 manufacturing jobs in the last 18 months alone as companies continue to move production overseas to places where labor costs are cheaper.

What about the environment?

But critics say that WTO decisions on trade have undermined important environmental safeguards. Shrybman cites the Biosafety Protocol of the UN Convention on Biological Diversity as an example. Last February, more than 140 nations met in Colombia to complete the Biosafety Protocol, the result of seven years of international effort toward a policy to protect the public from the potential health and environmental threat of genetically modified organisms.

The protocol was intended to give governments the right to consent to or to refuse shipments of genetically modified foods. But, as Global Trade Watch's Wallach and Sforza have documented, the US-led "Miami Group" consisting of several major exporters of genetically modified organisms blocked adoption of the protocol, citing conflicting trade obligations under the WTO. (See also "Hot Button: Genetically Modified Foods")

How about local food production?

While many European, Asian, and North American countries have indeed seen significant economic benefits from free trade, the impact of trade liberalization for developing countries has been far more negative than the WTO cares to admit. A recent United Nations Commission on Trade and Development report shows that the share of world exports and imports has, in fact, fallen sharply among the poorest countries in recent years. Rapid liberalization of trade and the removal of trade barriers has often forced producers in developing countries to compete with -- and lose to -- more sophisticated and industrialized foreign manufacturers. UN Council on Trade and Development has also found that those countries which have pursued rapid trade liberalization have seen phenomenal increases in wage inequalities at home.

12 October 2004

(04-4274)

EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES -

MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT

Request for Consultations by the United States

The provision by the EC and the member States of equity infusions and grants, including through government-owned and government-controlled banks. Examples include equity investment by the German government through Kreditanstalt für Wiederaufbau ("KFW") in Deutsche Airbus and the return of the shares acquired through this transaction to Deutsche Airbus' parent, the Daimler group, without compensation. The French government between 1987 and 1997 made equity infusions to offset losses of Aérospatiale and increased the company's share value through share transfers into the company in 1998.

The provision by the EC and the member States, through the European Investment Bank ("EIB"), to the Airbus companies, including Airbus' parent company EADS, of research and development and other loans on preferential terms, including financing for the A320, the A321, the A330/340, and the A380.

The assumption and forgiveness by the EC and the member States of debt resulting from launch aid and other large civil aircraft production and development financing, including debt accumulated by Deutsche Airbus and forgiven by the German government and debt assumed by the government of Spain on behalf of Construcciones Aeronauticas SA ("CASA").

Press/39411 January 2005DIRECTOR-GENERAL

Supachai welcomes EU — US decision on aircraft dispute

Director-General Supachai Panitchpakdi today welcomed the decision taken by the European Union and the United States to negotiate a bilateral resolution to their ongoing dispute concerning aircraft subsidies rather than continue the cases they had brought in October to the WTO’s Dispute Settlement Body.

MERCOSUR

Treaty Establishing a Common Market between the Argentine Republic, the

Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of

Uruguay

http://www.sice.oas.org/trade/mrcsr/mrcsrtoc.asp

Chapter I: Purposes, Principles, and Instruments

 Chapter II: Organizational Structure

Chapter III: Period of Application

Chapter IV: Accession

Chapter V: Denunciation

Chapter VI: General Provisions

AnnexesAnnex I: Trade Liberalization Programme

Annex II: General Rules of Origin

Chapter I: General Rules for Classification of Origin

Chapter II: Declaration, Certification, and Verification

Annex III: Settlement of Disputes

Annex IV: Safeguard Clauses

Annex V: Working Groups of the Common Market Group

The States Parties hereby decide to establish a common market, which shall be in place by 31 December 1994 and shall be called the "common market of the southern cone" (MERCOSUR).

The free movement of goods, services and factors of production between countries through, inter alia, the elimination of customs duties and non-tariff restrictions on the movement of goods, and any other equivalent measures;

The establishment of a common external tariff and the adoption of a common trade policy in relation to third States or groups of States, and the co-ordination of positions in regional and international economic and commercial forums

ORGANIZATION

• The Council shall be the highest organ of the common market, with responsibility for its political leadership and for decision-making to ensure compliance with the objectives and time-limits set for the final establishment of the common market.

• The council shall consist of the Ministers for Foreign Affairs and the Ministers of the Economy of the States Parties.

The Common Market Group shall be the executive organ of the common market and shall be co-ordinated by the Ministries of Foreign Affairs.

The Common Market Group shall have powers of initiative. Its duties shall be the following:

- to monitor compliance with the Treaty;

- to take the necessary steps to enforce decisions adopted by the Council;

- to propose specific measures for applying the trade liberalization programme, co-ordinating macroeconomic policies and negotiating agreements with third parties;

- to draw up programmes of work to ensure progress towards the formation of the common market

GENERAL RULES OF ORIGIN

1. Products manufactured wholly in the territory of any of the Parties, when only materials originating in the States Parties are used in their manufacture;

2. (b) Products included in the chapters or headings of the tariff nomenclature of the Latin Arnerican Integration Association referred to in Annex 1 of resolution 78 of the Committee of Representatives of that Association, simply by virtue of the fact that they are produced in their respective territories

•Products in whose manufacture materials not originating in the States Parties are used, when such products are changed by a process carried out in the territory of one of the States Parties which results in their reclassification in the tariff nomenclature of the Latin American Integration Association under a heading different from that of such materials, except in cases where the States Parties determine that the requirement of Article 2 of this Annex must also be met.

•In cases where the requirement of Article 1 (c) cannot be met because the process carried out does not involve a change in nomenclature heading, it shall suffice that the c.i.f. value of the third country materials at the port of destination or the maritime port does not exceed 50 per cent of the f.o.b. export value of the goods in question