VIETNAM NATIONAL UNIVERSITY–HCMC FACULTY OF ECONOMIC LAW

THE UNIVERSITY OF ECONOMICS AND LAW Lecturer: Dr. ĐÀO GIA PHÚC, LL.D.

INTERNATIONAL TRADE LAW

Assignment

Unit 6: NATIONAL TREATMENT

Materials used in class (please read them in advance):

- Article III of GATT 1994

- NYU Material: “NYU-NT-2017-edition.pdf”

Questions:

Access the NYU Material:

1. Japan – Alcoholic Beverages II: answer in brief (both in Panel report and Appellate Body
report)
− Who are parties of the case?
− Which measure is at the issue of the case?
− How did the panel and Appellate body clarify Article III:1?
− What is the structure of Article III:2?
− How many elements need to be proved in order to decide whether a measure violate
Article III:2, first sentence?
− How many elements need to be proved in order to decide whether a measure violate
Article III:2, second sentence?
− What is the difference(s) between a ‘like product’ and a ‘directly competitive and
substitutable product’?
2. EC – Asbestos: answer in brief (both in Panel report and Appellate Body report):
− Who are parties of the case?
− Which measure is at the issue of the case?
− What are rulings and reasoning of the panel for the issue of whether the measure of EU is
violate Article III:4?
− What are the differences between the findings of the Appellate Body and the panel
concerning this issue? Why (elaborate the Appellate Body’s reasoning)?
− How the requirements of national treatment differ with respect to taxation and regulation?

1
Case-solving:

Traditionally, Newland is a wine-drinking country. However, recent market research has shown
that demand for beer in Newland is steadily growing. RichBrew Inc. of Richland, one of the world’s
largest beer producers, therefore wants to increase its exports of ‘specialty beers’,1 ordinary beer and
non-alcoholic beer to Newland. Before its accession to the WTO, Newland limited the importation of
beer of any kind to meager 50,000 hectoliters per year. This quantitative restriction was out into place
in the late 1950s to protect the many winegrowers in Newland from competition from imported beer.
The National Association of Wineries (NAW) was, and still is, a powerful lobby in Newland politics.
Beer production in Newland has always been and remains small.

On accession to the WTO, Newland abolished the quantitative restriction on the importation of
beer. However, around the same time, it revised its tax regime for alcoholic and non-alcoholic
beverages. In addition to a value added tax (V.A.T) of 21% ad valorem applied to all alcoholic
beverages, the following excise tax rates currently apply: N$5 ppl on wine, N$15 ppl on ordinary beer
and N$6 ppl on specialty beers.2 This excise tax does not apply to non-alcoholic beer. However, it is
subject to a VAT of 21% ad valorem whereas canned grape-juice are subject to a 15% ad valorem.

In support of the national wine industry, Newland’s National Federation of Restaurateurs, a

government-sponsored organization, has instructed its 10,000 members not to serve beer with
traditional Newland dishes. Municipal authorities in Newland’s main wine-producing regions also
prohibit serving beer on weekends.

You are an associate in an international law firm base in Viet Nam. Your firm has been chosen
by Newland government to provide legal advice on all issues raised above. You have been instructed
to limit your legal brief to the question of whether there are violations of the national treatment
obligations under WTO law.

1
The specialty beers concerned are called ‘alcoholic cider’ with fruit flavours and alcohol content of 9-12%, almost as high
as wine.
2
N$ stand for Newland dollars, and ‘ppl’ for ‘per proof litre’. Since alcoholic beverage will vary alcohol contents (proof),
2
N$specific
the stand for Newland
excise dollars, and
tax applicable to a‘ppl’ for ‘per
particular proof litre’.
alcoholic Sincewill
beverage alcoholic beverage on
vary depending willitsvary alcohol
alcohol contents
contents per (proof),
litre.
the specific excise tax applicable to a particular alcoholic beverage will vary depending on its alcohol contents per litre.
N$1 equals 10.000 VND.
2