INTERNATIONAL LAW

National Treatment
         … No discrimination

The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement, in general which means to reduce the tariff and increase the trade, was signed in 1947. It was replaced by World Trade Organization in 1995. According to its preamble; the purpose of the GATT is the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis."



Article III of GATT deals with National Treatment, which means that there should be no discrimination on the same type of products made in the country itself and imported product, i.e. foreign products should be treated equally to domestic products. National Treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of National Treatment even if locally-produced products are not charged an equivalent tax. It is one of the important pillars of WTO. It is the very heart of it.



National Treatment provides that there should not be discrimination between domestic products and foreign products on the basis of:

(a) Internal taxes,

(b) By way of secondary treatment, and,

(c) Safeguard measures.
http://www.law.duke.edu/lib/researchguides/gatt.html
http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm



In this case Japan (Taxes on Alcoholic Beverages 1996) imposed taxes on the alcoholic beverages based on the content of the alcohol. As the content of alcohol in Japan beverages was less as compare to that of the imported beverages. It was seen that whether the taxed items are like; and whether the taxes applied to the imported products are in excess of those applied to the like domestic products. To protect the domestic market Japan imposed such tax on the products. Hence this was the discrimination on the basis of internal taxes.

This case states; "[a] national treatment obligation is a general prohibition on the use of internal taxes and other internal regulatory measures so as to afford protection to domestic production".

Therefore we can conclude;

Foreign product = domestic product; and lso,

Domestic product + same taxes = Foreign product + same taxes

PRIYAM KAPOOR

3RD YEAR BA.LL.B.